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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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