Risk Identification (Market, Credit, Liquidity, Operational)

What it means

Categorizing risks so each gets an owner and a mitigation.

Why it matters

Different risks need different tools (hedging, credit limits, cash buffers, controls).

How to calculate — with Cawan's Shoes

Cawan's Shoes risks broken out by type, with dollar exposures: • MARKET — FX exposure ~$180M net long USD vs. EUR/JPY/CNY; 1% USD move = $1.8M P&L. Cotton price 1σ move = $4.2M COGS. Rates: $400M floating debt, 100 bps = $4M. • CREDIT — Wholesale AR $40M; top 10 accounts = 58%. Dick's, Foot Locker, Amazon each >$4M. Credit insurance on 4 accounts covers $18M. • LIQUIDITY — Peak-season inventory build hits $80M working-capital swing (Jul–Sep). $150M revolving credit facility (undrawn) covers 1.9x peak need. • OPERATIONAL — 68% of production in 2 provinces = single-region shock could halt $340M revenue. Business-interruption insurance limit $25M. Each risk type has a named VP owner and a separate mitigation playbook.

What's at stake if you ignore this

One-size-fits-all risk approaches fail on the biggest exposures.