METHODS OF ANALYSIS AND ESTIMATION OF RISKS AT THE ENTERPRISES OF NON-FINANCIAL SPHERE OF LATVIA

The author considers the problems of analysis and assessment of risks at the enterprises of non-fi nancial sphere basing on tactical standards of risk management. The author studies the development and impact of the theory of economic cycles on the system of risks in entrepreneurship of Chizhevsky’s and Kondratjev’s temporary cycles that are at the same time space cycles. The author expresses their attitude to the opportunity of using autogenetic and risks identifi cation. Astrolinguistics studies the nature of changes in macroeconomic environment on the basis of information about the mutual position of the solar system’s planets in the process of their motion. This paper discusses how variety of scope methods may be applied for assessment of the profi le of risks at the enterprise.


Introduction
Under the infl uence of different factors entrepreneurial activities may be misbalanced and terminated at all. That is why risk problem is crucial for all enterprises regardless of their scope and branches. Unlike fi nancial sector of economy non-fi nancial sector lacks strict requirements on organization for risk management. The conducted research in the fi eld of risk management in large international companies, for instance, the study of Ernst & Young (Independent Directors...2007) allows to conclude that during the recent 2-3 years the levels of business risks have substantially increased. This fact was mentioned by 72% out of 150 respondents. The respondents mainly considered dangers concerned with the environment in which the activity of the company was conducted (17%), operational risks (12%), technological risk (11%) and competition (10%). What is important in risk management organization is obtaining information about internal and external environment, needed for decision-making. Taking into account the analysis of such information and management risk objectives it is possible to determine correctly the probability of occurrence of events, to fi nd out the risk level and evaluate its cost.
In the published study of the World Bank "Doing Business in : Creating Jobs" (2006 Latvia has not demonstrated the best indicators of solvency process effi ciency in European in Central Asian regions. In Latvia the process of insolvency lasts on average 3.0 years, cost of bankruptcy proceeding is 13.0% and recovery rate, which calculates how many cents on the dollar claimants recover from an insolvent fi rm, is 34.8. Similar indicators for Lithuania are 1.7; 7% and 50.5 cents on the dollar. Estonia -3.0; 9% and 39.9 cents on the dollar (Doing Business...2006). According to the indicator "Closing Business" in the region "Europe and Central Asia" it is Lithuania which is the 1-st, Estonia -the 6-th and Latvia occupies only the 9-th place. Latvia occupies the 24-th place among all the studied 175 countries of the world in the fi eld of winding up commercial activities (in terms of 10 criteria used for assessment), being far ahead of such states as Austria, France, Spain and Italy, but Latvia lags behind the neighbouring countries such as Lithuania (16-th place) and Estonia (17-th place). The given material testifi es to the fact that the state aims at forming external environment of risk management organization. It is possible to gain the impression about external environment risks on the basis of ratings of country risks and business environment relying on expert assessment. These famous macro-oriented models, introducing periodic editions include: BERI (Business Environment Risk Index), WPRF (World Political Risk Forecasting), ICRG (International Country Risk Guide) and Economist Intelligence Unit. Table 1 gives the characteristic country risks on the fi ve constituents for Estonia, Latvia and Lithuania. 3. Regional rank**** 1 6***** 8 AAA = least risky; D = most risky; ** 10 maximum; *** out of 82; ****out of 16; *****out of 17.
In 2007 international rating agencies stated that risks in the Baltic countries increased Fitch Rating introduced as index A (economic situation can affect fi nance) for Estonia and Lithuania, but Latvia was assessed as A-.
Fitch holds the view that Latvia may become the most vulnerable and Lithuania least of all provided sudden adjustment of capital fl ow leading to a sharp slowdown of economic growth. In these conditions it is important to make active all the mechanisms conducive to strategic goals achievement, realize innovative decisions and increase competitiveness. These mechanisms include risk management.
However, there is a long way ahead to comprehension of the necessity of creating an exhaustive system of risk management both in the system of higher education and in the system of training the staff already working in industrial enterprises. At the large enterprises in Latvia for risk management either special units have been established or their management is conducted within the framework of the system of quality management (in case of getting or training for getting this quality management certifi cate). However, in both cases in risk management an active role belongs to the system of an internal audit (Guidance of risk...2006). Despite the current progress compared with small and medium-sized enterprises it is not worth considering that non-fi nancial sphere of enterprises started creating a comprehensive system of risk management (Enterprise-wide risk management ERM-COSO). Risk managers are not fully aware of the fact that ERM-COSO is not only an instrument which helps reduce threats but also a mechanism for establishing an environment, improving the process of decision-making which retains and increases the value of an enterprise. At present in Latvia legislative normative demands for business risk management continue to develop and improve.

Methods of risk analysis in the system of risk management in Latvia
To deepen into the complexity of the problem of the application of methods of identifi cation and risk analysis at the enterprises of non-fi nancial sphere it is necessary to take into account the fact, that risk has two constituents: downside risk (threats) and upside risk (opportunities). Risk should be considered as quantitative measure of threat, as probable measure of threat, as probable measure of occurrence of technogenic or natural phenomena, as well as mathematical expectation of damage caused by accidents, catastrophes and hazardous natural phenomena.
Risk cost means possible losses of entrepreneurial costs on reduction of the value of possible losses or costs on recovering these losses and their consequences. An increasing demand for risk management encourages risk managers to carefully consider the disposition of risk at their enterprises. It is not so easy to discover and assess the range of risk at an enterprise once and for ever in the 21-st century. The range of risk changes not only after recognition of a separate kind of risk but also its composition. Changes in the risk range occur not only as a result of sudden coincidence, but also as a result of the movement of an enterprise according to its life cycle. In all cases the size of risk at an enterprise may be described with the help of the system, expressions (1)-(4): where R t -the total value of the risk at an enterprise; R tc -the total controlled risk at an enterprise; R ef -the value or the risk which is indicated by external factors; R ed , R eind -risk value indicated by external direct and indirect factors; R tp -value of risk which is indicated by the internal factors of an enterprise; R pi , R pf -risk value indicated by relevant processes of investment and fi nancing at an enterprise; R popa -risk value indicated by the process of organization of production activity at an enterprise; R 0 -risk value indicated by other internal factors at an enterprise; T cp -product life cycle containing 8 directions; T cb -branch life cycle containing 6 directions; T co -life cycle of an organization containing 7 directions; T tco -total life cycle of an organization; T cgd -cycle of global development (Komkova, Voronova 2003  . Very frequent is a combination of quantitative and qualitative methods of risk assessment, in this case it is possible to speak about a semiquantitative assessment method. It is possible to distinguish the most commonly applied methods of risk assessment in the fi eld of their application for analysis (identifi cation, description and estimation) and com-parison of different kinds of risk (risk evaluation). For example, methods of assessment of any risks: STEP/ PEST and SWOT analysis, environmental threats and opportunities matrix (ETOM),"SO-What" analysis, modelling of interrelations, event tree analysis, decision making in the risk conditions and indefi niteness, statistical inference, life cycle of various elements of an organization (length of existence, important factors), analysis of fi nancial coeffi cient, scenario method. Technologies of negative risks (hazards) assessment may be exemplifi ed by: threat analysis, a tree of errors, FМЕА analysis (Failure Mode & Effect Analysis). Methods of positive risks assessment are: methods of marketing impact, research and development, testing marketing, business effect analysis and Value at Risk. Methods of risk analysis depend on the branch of enterprise and kinds of risk. Table 2 gives examples of the methods of the analysis of industrial risk depending on the stage of the life cycle of an enterprise, having hazardous production.  Note: Stages of the life cycle of an enterprise having hazardous production: 1) choice of location of enterprise; 2) projecting; 3) Introduction into operation; 4) exploitation; 5) reconstruction, + -least suitable method of analysis; ++ -recommended method; +++ -the most suitable method.
The methods of assessment of working environment risks, recommended for application at the enterprises of Latvia are stated in detail in the study "Main trends of assessment of working environment risks" (Main trends of assessment...2007).

The place of traditional and non-traditional methods of risk analysis in the system of risk management in Latvia
Besides the traditional methods of identifying and assessing risk nowadays, non-traditional methods may be used as well. One of the non-traditional methods of risk identifi cation is astrolinguistics. The author expresses her opinion in relation to risk assessment by applying such a non-traditional method as astro-linguistics (Schumpeter 1939;Zalozneva 2007). Application of different astrolinguistic methods, investigation of social-economic cycles and occurring crises in a span of time have a range of values: worked out mathematical models and instruments to observe the movement of the planets and calculate their cycle.
There is proof that the Solar system planets cycles provide an opportunity to discover changes in social and economic development trends. The latter circumstance may be used in doing SWOT analysis of large enterprises projects. Introduction of astrological methods for investigation of economic cycles and risk is aggravated by the fact, that there exist few special researches with practical application in making urgent forecast and unsatisfactory exactness. There is strong prejudice against risk assessment from the economic point of view especially by management personnel, who consider it as "rubbish".
Astrolinguistics holds the view that at a certain moment of time all the objects undergo processes which are subject to uniform rules. Astrolinguistics is based on astrologic symmetry, the principle of holographic information and genetic unity in everything. Astolinguistics means that at a certain moment of time there are activities in all objects which are subject to unifi ed laws. These processes can be described by means of astrological symbols and operated on the basis of the principle of symmetry, which is a universal principle of construction and cognition of the world. Horoscope is an instrument in establishing correlation between space and time. Horoscope is a mathematical model which is like a circle of eclipse on which the position of the planets at a certain period of time is fi xed for a given geographic place on the Earth.
Astrolinguistics does not consider laws within a year or month but in the framework of time, that corresponds to the cycles of the activity of the Sun. It was A. Chizhevsky who fi rst discovered periodic changes in the sun activities. Later on an economist N. Kondratjev discovered economic cycles. In 1939 an American J. Schumpeter published a book "Business activities cycles" (1939) and Kondratjev's discovery became famous in the business world. Cycle theory has existed for 2.5 thousand years. Greek philosophers discussing accumulation of empiric knowledge made an attempt to describe cycles which clearly manifested and participated in the development of nature and humanity. At the beginning the cycle was demonstrated like a circle with the same movement phases. At present according to R. Mougle data since 1940 around 5000 cycle phenomena of different types have been discovered (Mougle 1995). For instance, Kutchin's cycles with a length of 3-5 years concerned with a relative value of material resources reserves at enterprises; schools of Dzagler's cycles, lasting 7-10 years appearing as a result of interaction of different credit-monetary factors; S. Kuznets' cycles with a length of around 29 years, resulting from the terms of reproduction in building. A. Chizhevsky discovered 22 and 11-year cycles of the Sun activity. The cycles discovered by N. Kondratjev (long-wave cycles) lasted 45-50 years (Jakovec, 1999;Mougle 1995;Schumpeter 1939;Risk Management...2000), sprung as a result of structural reconstruction of the technological base of public production. Theoretical conceptions of long waves are im-portant in the way, that they give a necessary basis for the assessment of economic situation and the forecast for the future. Every 5-6, 11, 16-17, 22, 45-67 years the waves of the Sun activity pose enterprises against a choice and the results depend on their own: whether they will be able to improve their activity (life) or will lose everything achieved in the previous years. For practical purposes it is reasonable to deal with various digital characteristics in economic cycles periodization in order to be more precise in stating risk factors coming from internal environment when entrepreneurs are planning their business activity. However, there are few practical studies on assessment of the cycle length of the development of separate enterprises. To assess risk groups by means of traditional risk investigation methods it is possible to use astrolinguistic methods, combining different methods of risk assessment, it is worth developing common strategy of risk management. To make risk management in entrepreneurship more effective it is necessary to carry out analysis of changes in nature and also analysis of social-economic changes and make a forecast by means of astrolinguistic analysis. To make a fast and qualitative astrolinguistic analysis it is necessary to work out a special computer programme, which unites astrolinguistic calculations, used by risk managers in the analysis of risk factors. Besides the assessment of technical aspects of risk, successful use of non-traditional methods, it would be reasonable to overcome the prejudice of the potential users against such astrological results.
The world practice gives plausible examples of successful application of economic astrology in economy and fi nance management, for instance, V. Angermeyer in his study "Economic astrology -economy and finance from the cosmological point of view". Using astrology he predicted stock exchange collapse in 1987 and economic crisis of the autumn of 1989. The author's practical experience in using astrolinguistics for the discovery of entrepreneurial risk in Latvia, testifi es to the application of only separate devices of astrolinguistics mainly in the assessment of social risks, risks concerned with an individual as such, e.g. the assessment of potential of professionalism of separate employees (Budjashkina 2002;Zalozneva 2007).

Discovery of the risks at the enterprises of non-fi nancial sphere by using test system
It is the system of fi nancial ratios that is commonly used to identify and analyse fi nancial risks at the enterprises of non-fi nancial sphere. Their application in general gives good results but the length of the life cycle of an enterprise for different countries in various branches differs. However, the curve of the life cycle consisting of individual stages each of which describes the dependence of an enterprise on external and internal conditions, occurring at a certain time span, will be identical for economic subjects. Each stage has specifi c groups of fi nancial risks, affecting the operation process of an enterprise. Table 3 introduces organizationaleconomic peculiarities of the operation of an enterprise at different stages of its life cycle. Fig. 2 gives an interrelation of the levels of business activity and fi nancial risk entailing the fi nancial risk depending on a stage. At the introductory stage an enterprise from the point of view of fi nancial risk is more prone to the impact of external factors. Taking into account that an enterprise can control only internal factors (the fi rst, the second… in sequence) at this stage it is needed to control a share of loan capital, profi tability of main activity and liquidity indicators. However, because of instability of stability indicators at a given stage the further factors are the indicators of the effi ciency of the main activity of the enterprise, volume of sales production, cost value. It is important to assess their dynamics.
Depending on the change in time of profi t from sales and cost value, there will be level of fi nancial risk. At the stage of the assessment of the risk of enterprises being at introductory stage in addition to the above -mentioned indicators it is necessary to take into consideration the condition of fi nancial stability of an enterprise functioning. At the growth stage, a rapid increase occurs in profi t and stabilization of fi nancial indicators of relation to equity and loan capital. The profi t is capital. The profi t is considered as past growing dynamics of indicators. It is possible to assess the level of fi nancial risk of an enterprise at this stage on indicators of relation to equity and loan capital. The profi t is considered as fast growing, dynamics of volume of sales is positive. At the maturity stage an enterprise operates in full swing, the indicators are stable but due to increasing competition and wearing out of capital may shift to the decline stage. In this case it is necessary to control the volume of sales and the turnover of assets will testify to the reduction of competitiveness of production and increase stock. At this stage it is not possible to judge about the level of the fi nancial risk of the enterprise according to the indicators of cost value and profi ts from sale, as there may take place a strategy of renovation of assets which may tell on the indicators, but not always means the increase of the fi nancial risk of the enterprise. The occurrence of crisis can be predicted according to its probability and impact. To discover fi nancial risk by using publicly available information more frequently methods of special coeffi cients are applied.
Test task. To discover the signs of the fi nancial risk of an enterprise in the short time period, taking into account the organizational and economic features of its functioning at different stages of life cycle. General description of a test. During the test analytical relations are calculated, which characterize proper signs of fi nancial stability at different stages if an enterprise is at different life cycles (Tables 4, 5 and 6). The au-

Dynamics of indexes
Profi t from realization Cost value per unit 1. Minimum K ca ≥ 1 P p (t) = P p (0) + at I p (t) = l p (0) -at 2. Middle K ca ≥ 1 P p (t) = P p (0) + at I p (t) = l p (0) + at 3. High K ca ≤ 1 P p (t) = P p (0) -at I p (t) = l p (0) -at 4. Situation of appearance of fi nancial risk K ca < 1 P p (t) = P p (0) -at I p (t) = l p (0) + at thor's practical experience demonstrates that by using tests to discover fi nancial risks, it is possible to employ Duran's technique (Romancevucha, Voronova 2005).
The essence of the technique lies in the attribution of level of risk to an enterprise in relevance to actual level of indicatives of fi nancial stability and rating of each indicator expressed in scores according to expert assessment. Irrespective of the kinds of tests used by an analyst for discovering fi nancial risks one should not forget, that these are instruments of short-term analysis and it is recommended to analyse the state of strategic management at an enterprise.

Techniques of drawing a map of risk of an enterprise
In order to take into account and manage all risks of an enterprise, i.e. realize the concept of comprehensive system of risk management, it is necessary to draw a map of risks. Application of special methods for assessing separate kinds of risk does not allow to sum up all the profi le of a risk of an enterprise. There are various ways of implementing a drawing of risk profi le. (Barton et al. 2002;Order provided... 2006). The most popular are the techniques of drawing a matrix with an assessment according to scores, points or letters. In view of this goal an enterprise should have a scale of assessment developed: time of impact (p t ), probability (p i ), consequences (fi nancial or some others) (p f ). The scale is being developed with a different number of levels from 3 to 5-10. The author's personal experience testifi es to the fact, that it would be more prudent to use the scale for assessment of probability consequences and length of impact with the same number of levels.
Assessment of levels of risk on score points (RS) may be carried out by means of one of the following formula (Australian... 2006;Technique... 2006;Main ... 2007;Pettere, Voronova 2003): Choice of a number of assessed parameters and the technique of total assessment of risk are determined by the fi eld of production size of an enterprise and are ruled according to the Policy of enterprises in the fi eld of risk management, which is developed supporting technical standards in the sphere of risk management. Along with risk level assessment any enterprise should have a risk scale developed: not allowed, not desirable, allowed under control, allowed at risk, etc.
For example, for fi ve-level scale of assessment of probability and consequences a scale of risk level may be the following: 1-5 RS -Low; 6-12 RS -Medium; 13-25 RS -High Risk Level. Obtained assessment of risk level is depicted graphically in the form of a risk map. Risk profi le should not be focussed exclusively on the risks subject to management in accordance with the laws (environment and safety), but include other risks affecting the activity of an enterprise and which should be responded to.

Conclusions
Organization of risk management at enterprises of 1.
non-fi nancial sphere is carried out relying on tactical standards in the fi eld of risk management. Finding out risk factors and its assessment is an important element of risk management. In order to fi nd out and analyse different kinds of risk it is possible to use various methods.
While analyzing risk it is reasonable to use both 2.
traditional methods and also non-traditional -astrolinguistics which takes into account occurring of cyclical processes in the economy. Complex application of various methods allows to increase the quality and promptness of the obtained information about external environment and reduce entrepreneurial risk. To single out the reasons of fi nancial risks it is rea-3.
sonable to apply a wide range of techniques, including a system of tests, in which the fi nancial ratios used are selected with a view to taking into account the peculiarities of fi nancial risk development according to the stages of the life cycle of an enterprise. Duran's technique may be used for express analysis of fi nancial risk.
Developing the policy of risk management one 4.
should determine a scale system aiming at assessing the profi le of all risks and choose such a number of levels which will probably be suitable for assessment of as many risks as possible. Following the recommendations of tactical standards in the fi eld of risk management allows to use unifi ed techniques and diminish creation of the system of risk management.