business risk

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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 company will go bankrupt. Every company carries the business risk that it will produce insufficient cash flow in order to maintain operations. Business risk can come from a variety of sources, some systemic and others unsystemic. That is, every company has the business risk that the broader economy will perform poorly and therefore that sales will be poor, and also the risk that the market simply will not like its products.

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.
References in periodicals archive ?
In today's business environment tax risk is one of the more challenging business risks presenting both monetary and reputation consequences for corporations.
Protiviti, a leading internal audit and risk consulting firm, has introduced two advanced technology solutions that it says will help its clients better identify, evaluate and manage their business risks.
The solution is facilitated by using workshops with employees from different areas to identify business risks.
The company has formed a Business Risk Advisory Committee, which serves as the forum for reviewing selected business risks as they emerge.
But few have stopped to consider whether business risks - which may have a far greater impact on shareholder value - can be transferred to a third party in the same way.
Business leaders are asking why business risks of all types, not just financial risks, are causing trouble more often today.
Besides assessing the entity's and the auditor's business risks, the auditor sets planned audit risk.
In the process, we have created a model that we apply to business risks in three areas - environmental, process, and information for decision making - that affect the company as a whole or some specific process.
Sales and earnings trends are affected by many factors including, among others, our entry into an effective distribution agreement with one or more wholesale food brokers or large-scale retail outlets, the effectiveness of our promotion and merchandising strategies, the efficient operation of our production facility and supply chain, the changing dietary and culinary habits of consumers in our target markets, and our effective management of business risks.
Have we evaluated all business risks and their potential impact?
For example, Tosco's Linden, New Jersey, refinery could be considered the top risk area in the company based on the volume of its operations and the money While some internal auditors might audit the total refinery, "I am interested only in certain business risks within that operation," Marks says.
As to results presently deemed achievable for the fourth quarter, sales and earnings trends are also affected by many other factors including, among others, world and national political events, general economic conditions, the effectiveness of our promotion and merchandising strategies, our ability to integrate and profitably operate acquired businesses, the efficient operation of our supply chain, including the continued support of our key vendors, our effective management of business risks, including litigation, and competitive factors applicable to our retail and direct response markets.

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