This document discusses country risk analysis, which assesses potential risks and rewards of doing business in a country. Country risk represents adverse impacts of a country's environment on a multinational company's cash flows. Country risk analysis can be used to monitor countries where a company currently operates, screen countries to avoid excessive risk, and improve analysis for long-term investment decisions. It discusses political, economic, subjective, and financial factors to consider in country risk analysis. The presentation also outlines oversight policies and procedures that multinational companies employ to manage country risk exposure.

1. Presented By: Presented To:
Mrs. Harpreet Kaur Gurpreet Kaur
Manpreet Kaur
MBA 4th sem

2.  Country Risk Analysis is assessment of potential
risks and rewards from doing business in country.
 Country risk represents potentially adverse impact
of a country’s environment on the cash flow of the
MNC’s.
 Country risk can be used:
 to monitor countries where the MNC is presently
doing business;
 as a screening device to avoid conducting business
in countries with excessive risk; and
 to improve the analysis used in making long-term
investment or financing decisions.

3.  Used to monitor countries where the firm is
presently engaged in international business
 Used by the firm as a screening device to
avoid countries with excessive risk
 Used to assess particular forms of risk for a
proposed project considered for a foreigan
country

4. Factors
Political
Economic
Conditions
Subjective
Financial

5. Stability of the
local political
environment
Consensus
regarding
priorities
Attitude of
host
Government
Mechanisms
for expression
of discontent
War

6. Inflation Rate Adjustment to
External Shocks
Current And
Potential State of
the Country’s
Economy
Resource Base

7. Oversight by
Board of Directors
Policies &
Procedures for
Managing CR
Country Exposure
Reporting System
Country Risk
Analysis Process
Country Risk
Rating
Country Exposure
Limits
Monitoring
country
Conditions
Stress Testing
Internal Controls
and Audit

8. Debt Related
factors
Balance Of
Payments
Economic
Performance
Checklist
approach
Political
Instability

9. THANKS