@article{ernst2025assessment,
  title = {Assessment of Free Risk Capacity under Liquidity Considerations in International Companies},
  author = {Dietmar ERNST and Alicia SINSEL},
  year = 2025,
  url = {https://ibimapublishing.com/p-articles/45FINACC/2025/4527125/},
  journal = {Communications of International Proceedings},
  volume = 2025 (11),
  doi = doi.org/10.5171/2025.4527125,
  abstract = {The transformation of entire industries, global crises, and increasingly detailed legal requirements and auditing standards for risk control require companies to know and analyze 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, companies lack scientific approaches for the practical fulfillment of these requirements. The objective of this paper is to develop and apply a practicable concept that enables companies to obtain a picture of their free risk-bearing capacity that can satisfy legal requirements. We focus on corporate liquidity and present two variants for deriving free risk-bearing capacity and calculating the probability of the company's existence being threatened. Variant 1 uses liquidity in a narrow sense and refers directly to net cash flow and liquidity ratios. Variant 2, on the other hand, uses liquidity in a broad sense, based on the probability of insolvency. Both concepts lead to similar results in the application example used here, with variant 1 focusing on liquidity management and variant 2 considering rating aspects.},
  keywords = {Simulation-Based Planning, Free Risk Capacity, Liquidity, Rating},
  note = Article ID: 4527125
}