Country

Risk
Analysis
Presented By:
Binod Marasini
Pratiksha Acharya

INTRODUCTION
Country Risk Analysis is
assessment of potential risks
and rewards from doing
business in country.
Country risk represents the
potentially adverse impact of a
countrys environment on the
MNCs cash flows.

Cont
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

IMPORTANCE
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 foreign country

INDICATORS OF COUNTRY
RISK

Large government deficit relative to GNP

High taxes

Pervasive corruption

High rate of money expansion

Substantial government spending yielding low rate
of return
Vast state-owned firms
Attitude that governments role is to maintain
living standards
Absence of basic government institutions

RISK RATING

THANK YOU