Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)

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Risk Analysis of Enterprise Financial Derivatives: Evidence from MGRM Company

Authors
Yulin Liu1, †, Jiayi Lu2, †, Shihang Wu3, †, Jiaqi Xu4, *, †
1Academy of Social Sciences, University of Manchester, M13 9PL, Manchester, United Kingdom
2Department of management, University of Toronto, M1C 1A4, Toronto, Canada
3School of Economics and Statistics, Guangzhou University, 510006, Guangzhou, China
4School of Business, INTI International University, 71800 nilai, Negeri Sembilan, Malaysia
†

These authors contributed equally.

*Corresponding author. Email: i18014317@student.newinti.edu.my
Corresponding Author
Jiaqi Xu
Available Online 15 December 2021.
DOI
10.2991/assehr.k.211209.168How to use a DOI?
Keywords
Financial derivatives; Metallgesellschaft Refining and Marketing; SWOT analysis; PEST analysis
Abstract

The hedging of financial derivatives is crucial for enterprise risk management. However, enterprises often ignore the complexity and leverage of derivatives transactions as well as add speculation in hedging operations, which attributes to the failure of hedging. A bad hedge will bring huge losses to enterprises and even lead to the risk of bankruptcy. Therefore, learning from the failure of others is helpful to improve the risk awareness of enterprises. Taking the bankruptcy of Metallgesellschaft Refining and Marketing (MGRM) company as an example, this paper investigates the conditions for the usage of financial derivatives based on SWOT and PEST as well as analyses the hedging failure process and related risks. According to the results, financial derivatives need to recognize the nature of transactions, prevent and control technical operational risks and actively manage after position establishment. These results shed light for risk analysis of financial derivatives.

Copyright
© 2021 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article under the CC BY-NC license.

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Volume Title
Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
Series
Advances in Economics, Business and Management Research
Publication Date
15 December 2021
ISBN
10.2991/assehr.k.211209.168
ISSN
2352-5428
DOI
10.2991/assehr.k.211209.168How to use a DOI?
Copyright
© 2021 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article under the CC BY-NC license.

Cite this article

risenwbib
TY  - CONF
AU  - Yulin Liu
AU  - Jiayi Lu
AU  - Shihang Wu
AU  - Jiaqi Xu
PY  - 2021
DA  - 2021/12/15
TI  - Risk Analysis of Enterprise Financial Derivatives: Evidence from MGRM Company
BT  - Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
PB  - Atlantis Press
SP  - 1036
EP  - 1041
SN  - 2352-5428
UR  - https://doi.org/10.2991/assehr.k.211209.168
DO  - 10.2991/assehr.k.211209.168
ID  - Liu2021
ER  -