1. Business Risk
Akilan
Financial Management
3/1/2014

2. 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
Financial Management
3/1/2014
1

3. TYPES OF RISK
Internal Risk
•
•
•
•
External Risk
• Economic Factors
• Natural Factors
• Political Factors
Human Factors
Technological Factors
Physical Factors
Financial Factors
Financial Management
3/1/2014
2

4. INTERNAL RISKS
Internal risks arise from factors which can be controlled.
Financial Management
3/1/2014
3

5. 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
Financial Management
3/1/2014
4

6. TECHNOLOGICAL FACTORS
•
•
•
•
Post dated machineries and technology
Power issues
Communication issues
Data security
Financial Management
3/1/2014
5

7. PHYSICAL FACTORS
•
•
•
•
Fire
Explosions
Acid Wastes
Toxic Gas
Financial Management
3/1/2014
6

8. FINANCIAL FACTORS
•
•
•
•
Repayment of credits
Low profit or Loss
Cash Flow
Salary Payment
Financial Management
3/1/2014
7

9. EXTERNAL RISK
External risks arise from factors which can not be controlled.
Financial Management
3/1/2014
8

10. ECONOMIC FACTORS
•
•
•
•
Demand for the product
Pricing
Foreign Exchange
Foreign Investment
Financial Management
3/1/2014
9

11. NATURAL FACTORS
•
•
•
•
Natural Calamities
Availability of raw materials
Holidays due to calamities
Weather
Financial Management
3/1/2014
10

12. POLITICAL FACTORS
•
•
•
•
Taxation
Change in reforms
Change in the contracts
Change in the government
Financial Management
3/1/2014
11