Analysis of Operation Risk Using the Instability Hypothesis
Analysis of Operation Risk Using the Instability Hypothesis

Summary/Abstract: The risk reflects the potential prejudice the patrimony and the activity of an economic agent can be exposed to, being a close correlation between taking the risk and the activity’s profitability, the profitability having to compensate for the risk taken. The operation risk in conditions of instability is analyzed with the help of nonlinear models, which are specific to small commercial companies and to new businesses. In order to establish the profitability threshold of mono productive and multi productive companies, using the hypothesis of instability, the behavior of costs compared to the physical volume of production must be studied, but also the behavior of turnover and profit compared to the physical volume of sales.

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