Financial Risk Management in a Global Pandemic

Companies are vulnerable to changes in the global business environment, one example was the global financial crisis of 2007-2009, which generated a slow economic growth in Finland 2009, and with existing high levels of debt, created a volatile global economic environment. Companies face various of risks in their day-to-day operations. This paper will debt to the processes of how companies could identify risks, analyse them, and make decisions based on the findings to mitigate the risks or accept them. The risks that have an immediate impact on the businesses bottom line are financial risks. The financial risks are anything that relate to cash flowing in or out of a company. To focus on the vulnerability in late 2019, there were finding of unknown disease in the capital city of Hubei Province, China which led to a pandemic formally today known as the COVID-19. The pandemic negatively affected people, companies, and economies globally. The pandemic posed extreme difficulties for companies, which needed to make financial decisions blindly due to the uncertainty of the severity and duration of the pandemic. Governments had to make decisions to first and foremost protect their citizens from the potentially harmful disease by restrictive measures. These restrictions had a great impact on industries, thus governments had to find solutions to support these companies that faced potential financial failure. The research will focus on the question of: “what if companies would have prepared themselves beforehand, could there have been less bankruptcies and layoffs?”