“Preparing your company for recession” … and recovery

Back in January 2008 CFO.com published an article titled “Preparing your company for recession” about how smart companies can prepare themselves for recession by using predictive modeling techniques and Monte Carlo simulations. The same is true during economic recovery: predictive modeling and Monte Carlo simulations can help companies to better anticipate the upturn.

As CFO.com explained [...]

Risk analysis

Risk analysis or risk management are concepts usually associated with financial institutions or large corporations. But risk is something that also small businesses encounter on a regular basis. They may however shy away from performing risk analysis since this concept may seem so “big enterprise”. But it’s not. Risk analysis is simply the identification and [...]

A safe dollar is worth more than a risky one

This is the second basic principle of finance. Future cash flows are not certain. However, some are more certain than others. You can be more certain of future values of government securities, for example, than of the future values of the stock market.

Different investments have also different levels of uncertainty or risk. The concept of [...]

Hello world!

Here is the team from FinanceIsland Inc. We have launched this blog to discuss financial analyses in businesses. Our focus is on finance, not accounting. To simplify the distinction, accounting activities – such as bookkeeping, auditing, and taxation – are backward-looking. Finance activities, on the other hand, are forward-looking, covering topics such as investment analysis, [...]