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business risk

   Also found in: Medical, Legal, Wikipedia 0.04 sec.
Business Risk
The risk that a company will not have adequate cash flow to meet its operating expenses.

Notes:
A company's risk is composed of financial risk, which is linked to debt, and risk, which is often linked to economic climate. If a company is entirely financed by equity, it would pose almost no financial risk, but, it would be susceptible to business risk or changes in the overall economic climate.


Business risk
The risk that the cash flow of an issuer will be impaired because of adverse economic conditions, making it difficult for the issuer to meet its operating expenses.

business risk
The risk that a business will experience a period of poor earnings and resultant failure. Business risk is greatest for firms in cyclical or relatively new industries. Business risk affects holders of stocks and bonds, since a firm may be unable to pay dividends and interest.

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Accounting firm Ernst & Young is expanding from its current sector--in which it provides auditing, tax reporting, tax advisory and business risk services--to technology and security risk services.
Over the past decade, however, business risk defenses have come under siege.
As for methodology, four models are used, with the total debt ratio (DEBT) as the dependent variables, and firm size (SIZE), growth opportunities (GRTH), profitability (ROA), tangibility of assets (TANG), non-debt tax shields (NDT), dividend payments (DIV), and business risk (RISK) as independent variables of corporation's feature.
 
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