Prico Management is licensed to provide investment consulting alongside its extensive experience in analyzing and researching financial exposures at various levels and angles – cash flow, operational, balance sheet, accounting, economic and business oriented. Prico has been advising the largest and leading companies of the Israeli economy for many years. As part of its services, Prico provides its clients with exposure studies, position papers and professional opinions.
In executing its activities, Prico utilizes its vast experience and unique databases developed over its years of professional operation, including systems based on advanced technology, an extensive financial database, acquaintance and understanding of the financial market and regulatory compliance.
Risk management policy success is contingent upon the consistent application of predefined Company principles. These principles are divided into those related to the identification of Company needs and to those related to the practical implementation of the policy.
Locating and monitoring market risks – Assessing the group's financial exposures in terms of balance sheet and cash flow, including the review and analysis of exposure to currency risks, inflation, benchmarks, interest rates and raw materials, credit and liquidity risks.
The risk survey generated by our Company is a highly professional tool, providing a quick and precise response to company finance managers and CEO's, as well as to consultants and accounting firms. In addition, it helps in the decision making process as related to financial exposures and hedging strategies. The risk survey introduces clear solutions to exposure as well as methods for implementing the strategies while maintaining ongoing business operations. The hedging strategies are selected according to economic considerations and financial risk assessment.
Effective hedging shall be achieved when a change in the hedging instrument value is identical to the change in the value of the hedged asset.
Financial exposure can be evaluated on two main levels:
Balance sheet exposure is a derivative of the balance sheet items which, upon the determining date, are not presented in the reporting currency. The company is exposed to exchange rate fluctuations and their balance sheet presentation. At a given point in time (end of each quarter), this exposure is reflected in the value of company assets and liabilities. This exposure is identifiable and is presented from an accounting viewpoint in the company's balance sheet.
Operational – Cash Flow
Cash flow exposure is derived of a lack of congruence in the basic asset, between the inflows – receivables – and the expenses – liabilities derived of currency differences, amounts, interest and exchange rates, receivable/payable date. This exposure is reflected in the company's cash flow over a period of time. It can be identified in the income statement presented by a company, both as related to the entire company and to the company investors/debtors.