Cataloged from PDF version of article.People have always evaluated qualitative factors as black boxes so far.
Academicians have put much effort to understand and explain these black boxes. The
improvements in technology, therefore in social sciences, ease these efforts
considerably. Risk is one of the qualitative factors, which drew people’s attention. As
a result, some forecasting techniques have been developed to know the unknown.
Risk means both profits and losses for people and firms. That is why, risk should be
managed to exploit the profits and avoid the losses.
Value-at-risk relying on the data about liquid assets was proposed to assist
financial firms such as banks, insurance companies, and investment companies to
manage their risks. Contrary to financial firms, non-financial firms have more
illiquid assets. These firms used value-at-risk to manage their risks initially but the
practical results were not satisfactory. Therefore value-at-risk should be revised and
adjusted to the non-financial firms. Consequently cash-flow-at-risk concept was
proposed to manage risk in non-financial firms. This study aims to apply cash flowat-risk
concept in publicly traded non-financial firms in Turkey. The data drawn from
financial statements were used because they helped to quantify risk in non-financial
firms. The results of the study reveal that the proposed model can be used to asses all
publicly traded non-financial firms’ risk exposure in Turkey for the next quarterÖzvural, ÖzhanM.S