business risk


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Related to business risk: Financial risk

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 ?
Most public corporations recognize the need to take various business risks in order to meet shareholder expectations on returns.
First, prior studies have not examined client's business risk, audit risk, and auditor's business risk simultaneously.
Traditional actuarial techniques are inappropriate in insuring business risk.
No business risk policy--There is no written requirement for managers to periodically assess business risk and performance of risk controls.
47 focus on business risk relates to risks associated with the issuance of financial statements.
Theoretically, shareholders could even sue a company over a loss, claiming it was remiss in not hedging business risk with derivatives.

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