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Risk factors' prediction model for the investment evaluation

Author

Listed:
  • Alica Tobisova

    (Technical University of Košice, Slovakia)

  • Andrea Seňová

    (Technical University of Košice, Slovakia)

  • Robert Rozenberg

    (Technical University of Košice, Slovakia)

Abstract

The article deals with the issue of increasing the competitiveness of enterprises and their long-term sustainability based on the efficiency of investment processes. Implementing new approaches to the company's decision-making processes will allow companies to overcome the pitfalls of the market environment created by the post-COVID period and the current energy crisis that has affected the world markets after the conflict between Ukraine and Russia. The article aims to verify the application of the methodology for increasing the competitiveness of enterprises based on the use of a model creating a fusion of traditional and sophisticated tools. The analyses carried out are based on the investment decisions of a real company operating in the Slovak Republic's territory in the production and supply of security products. Mathematical modelling and Monte Carlo simulation are based on the company's accounting and operational financial outputs (profit and loss statement, balance sheet). The methodology is based on mathematical modelling through static traditional financial approaches and their verification through sensitivity analysis, regression analysis and Monte Carlo simulation based on distributional distributions of risk factors. The output is the assessment of risk factors and their significance for the criterion value Net Present Value (NPV).

Suggested Citation

  • Alica Tobisova & Andrea Seňová & Robert Rozenberg, 2023. "Risk factors' prediction model for the investment evaluation," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 11(2), pages 153-168, December.
    • Handle: RePEc:ssi:jouesi:v:11:y:2023:i:2:p:153-168
    DOI: 10.9770/jesi.2023.11.2(11)
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    References listed on IDEAS

    as
    1. Abba, Z.Y.I. & Balta-Ozkan, N. & Hart, P., 2022. "A holistic risk management framework for renewable energy investments," Renewable and Sustainable Energy Reviews, Elsevier, vol. 160(C).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    competitiveness; sustainability; Monte Carlo simulation; sensitivity analysis; regression analysis;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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