Post by kamakshi on Apr 13, 2019 11:01:53 GMT
Hi All,
I have posted a topic on concentration risk interest relating to investor investment.Kindly read through and comment.
Concentration Risk Pattern:
• Satisfactory Investor
• Non Satisfactory Investor
Satisfactory Investor:
When an investor is satisfactory with the earnings that he has assumed to get, he will go through the financials and audited statements to make sure that the business as a whole is concentrated on the objects which the gains from business objectives will likely to be routed to the investment that the investors are prudentially invest. Thereby the concentration risk interest will become Zero.
Non Satisfactory investor:
On the other hand, if the investor is not satisfactory with the earnings that he will get from the investments what he will do?
He will question the management why he couldn’t fetch so much of income what he has derived by comparing with the industry in which the company is working and the investment nature. Investment nature is nothing but the way in which the investments are routed so as a diligent investor will likely to earn investment interest.
Here comes the role of auditors and consultants:
What they should do to operationalize this:
First they should find out the concentration risk pattern from investors angle by interpreting what a non satisfactory investor will do as aforesaid.
Then comes concentration risk pattern from companys angle.
Example: If a company wants to equate his capitalization process, it can invest comparative funds in the investments that could finance periodically. It can be proved as a factor that will make concentration risk interest to be zero. Investor cannot question on this.
On the otherhand, if the investor has judged the business and came to a conclusive factors or similar and has come to a conclusion that the investment is not as per the assumed investment portfolio of similar companies in the same industry or the prudential investment nature.
Concentration risk interest could also be derived by the management of the company based on the internal and external factors but there may be reasons that some of the risk factors may be left out. That a outside consultant will do.
Hence there may be difference in the opinion of the company and the consultants. This opinion could be resolved by proving as additional statement in periodic statements that is sent to investors.
How to prove:
That haphazard investments are made based on the non judgemental critical cases won if it is taken to the court.
Concentration risk interest may be floated in the open marked and also it could be pledged with company to company to stabilize open market interest from time to time and gain upon.
Thanks and Regards,
Kamakshi N
I have posted a topic on concentration risk interest relating to investor investment.Kindly read through and comment.
Concentration Risk Pattern:
• Satisfactory Investor
• Non Satisfactory Investor
Satisfactory Investor:
When an investor is satisfactory with the earnings that he has assumed to get, he will go through the financials and audited statements to make sure that the business as a whole is concentrated on the objects which the gains from business objectives will likely to be routed to the investment that the investors are prudentially invest. Thereby the concentration risk interest will become Zero.
Non Satisfactory investor:
On the other hand, if the investor is not satisfactory with the earnings that he will get from the investments what he will do?
He will question the management why he couldn’t fetch so much of income what he has derived by comparing with the industry in which the company is working and the investment nature. Investment nature is nothing but the way in which the investments are routed so as a diligent investor will likely to earn investment interest.
Here comes the role of auditors and consultants:
What they should do to operationalize this:
First they should find out the concentration risk pattern from investors angle by interpreting what a non satisfactory investor will do as aforesaid.
Then comes concentration risk pattern from companys angle.
Example: If a company wants to equate his capitalization process, it can invest comparative funds in the investments that could finance periodically. It can be proved as a factor that will make concentration risk interest to be zero. Investor cannot question on this.
On the otherhand, if the investor has judged the business and came to a conclusive factors or similar and has come to a conclusion that the investment is not as per the assumed investment portfolio of similar companies in the same industry or the prudential investment nature.
Concentration risk interest could also be derived by the management of the company based on the internal and external factors but there may be reasons that some of the risk factors may be left out. That a outside consultant will do.
Hence there may be difference in the opinion of the company and the consultants. This opinion could be resolved by proving as additional statement in periodic statements that is sent to investors.
How to prove:
That haphazard investments are made based on the non judgemental critical cases won if it is taken to the court.
Concentration risk interest may be floated in the open marked and also it could be pledged with company to company to stabilize open market interest from time to time and gain upon.
Thanks and Regards,
Kamakshi N