How would you define operating risk and financial risk for enterprises? What resources would you access...

How would you define operating risk and financial risk for enterprises? What resources would you access to obtain discussions and analyses of firm risk for publicly-traded firms?

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Expert Solution

Operational risks are those risk that are directly related to the operation of business. For example, risk associated with suppliers, risk of lock out and strike, risk of spoilage of inventory or breakdown of machinery etc.

Financial risk is the possibility that shareholders will lose money when they invest in a company that has also debt capital, if the company's cash flow proves inadequate to meet its financial obligations. Financial risks arise due to large debt obligation or insufficient cash availability, low earnings etc.

To analyse and discuss the firm's risk, company's annual report can be accessed. The other sources include the financial websites, research papers, journals, government's report on market and industry and company's own budget report.

jeff jeffy answered 1 year ago

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