Abstract:

The transformation of entire industries global crises and increasingly detailed legal requirements and auditing standards for risk control require international companies to know and analyse their free risk bearing capacity. Free risk bearing capacity is the maximum amount of risk that a company can bear without endangering its continued existence. However international companies lack scientific approaches for the practical fulfilment of these requirements. The objective of this paper is to develop and apply a concept that enables international companies to measure and obtain a picture of their free risk bearing capacity. We focus on corporate liquidity and present two variants for deriving free risk bearing capacity and detecting.