Financial Risk

Financial risk is the probability of a negative event that causes financial loss in a company. It must be calculated before deciding to carry out an investment.



Bibliography:

Kalkine Media. What is Financial Risk? https://www.youtube.com/watch?v=6KnKFSKDDpo&ab_channel=KalkineMedia

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Types of Financial Risks

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  4 types of financial risks Before  spending time to seek techniques that assess and mitigate risk , it is important for the analyst to know what  financial risk  is and what its practical manifestations are. Financial risk can be understood  as the probability of having a negative and unexpected result due to market changes. These risks can be caused by poor cash  flow management or by below expected revenue-related risks. They can occur for different reasons: Inadequate management. High debt. Changes in exchange or interest rates. Market transactions or investments with a high level of vulnerability. Lack of information for decision-making. There are 5 main types of financial risk:   market risk, credit risk, liquidity risk , legal risk and operational risk. If you would like to see a framework to manage or identify your risk  learn about COSO, a 360º vision for managing risk.  Let's look at each one in detail. 1. Market risk Among the  types of financial risks , one of the most
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