04/12/2023

Financial Management

Business RiskAkilan

04/12/2023Financial Management

IS NOT BUSINESS ITSELF A

RISK ? Business

risks implies uncertainty in profits or danger of loss and the

events that could pose a risk due to some unforeseen events in future, which causes business to fail

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04/12/2023Financial Management

TYPES OF RISK

Internal Risk• Human Factors

• Technological Factors

• Physical Factors

• Financial Factors

External Risk• Economic Factors

• Natural Factors

• Political Factors

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04/12/2023

Financial Management

INTERNAL RISKS

Internal risks arise from factors which can be controlled.

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04/12/2023Financial Management

HUMAN FACTORS

• Strikes and Lock-outs by workers union

• Negligence and dishonesty of an employee

• Accidents or death of employee

• Incompetence or wrong employee for the job

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04/12/2023Financial Management

TECHNOLOGICAL FACTORS

• Post dated machineries and technology

• Power issues

• Communication issues

• Data security

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04/12/2023Financial Management

PHYSICAL FACTORS

• Fire

• Explosions

• Acid Wastes

• Toxic Gas

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04/12/2023Financial Management

FINANCIAL FACTORS

• Repayment of credits

• Low profit or Loss

• Cash Flow

• Salary Payment

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04/12/2023

Financial Management

EXTERNAL RISK

External risks arise from factors which can not be controlled.

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04/12/2023Financial Management

ECONOMIC FACTORS

• Demand for the product

• Pricing

• Foreign Exchange

• Foreign Investment

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04/12/2023Financial Management

NATURAL FACTORS

• Natural Calamities

• Availability of raw materials

• Holidays due to calamities

• Weather

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04/12/2023Financial Management

POLITICAL FACTORS

• Taxation

• Change in reforms

• Change in the contracts

• Change in the government

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