Financial Risk is the possibility of losing money on an investment or business venture. Some more common and distinct financial risks include credit risk, liquidity risk, and operational risk. Companies can be susceptible to financial risks in several ways.For example, if a company loses money on its business operations, that’s a form of operational risk. On the other hand, if a company makes bad financial decisions, such as excessive borrowing and lending practices, that’s a form of financial risk. Both types of risks can have dire consequences for companies and investors alike.A company can lose money from operational and financial risks. Operations refer to the processes used by a company to generate income or revenue for its investors. Financial operations involve the flow of money between companies within the economy as well as between countries. A company can make bad decisions when performing its financial operations— especially when handling large sums of money.Some common examples of financial operations are investing in businesses, issuing bonds and loans to other companies, paying employees and tax authorities and etc. If the company performs these operations poorly— or refuses to perform them at all— it will lose money over time. In this case, the company is said to have suffered from an investment or business venture loss.Financial risks are vulnerabilities faced by both companies and investors alike that cause potential losses from poor decisions made in operating or managing finances . Many factors affect whether or not someone suffers from such losses; however , sound decision-making is always key . In light of this information about financial risks, what do you think about proposals like “beggar thy investor?”
