financial risk


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Financial risk

The risk that the cash flow of an issuer will not be adequate to meet its financial obligations. Also referred to as the additional risk that a firm's stockholder bears when the firm uses debt and equity.

Financial Risk

Any risk that comes from giving money to another person or entity. For example, if one lends money, one carries the financial risk that the borrower will not repay it. A venture capital firm carries the financial risk that its investments will never become profitable. Likewise, an investor who purchases an asset carries the financial risk that he/she will be unable to re-sell it.

financial risk

The risk that a firm will be unable to meet its financial obligations. This risk is primarily a function of the relative amount of debt that the firm uses to finance its assets. A higher proportion of debt increases the likelihood that at some point the firm will be unable to make the required interest and principal payments.
References in periodicals archive ?
The global Financial Risk Management Software market will reach xyz Million USD in 2018 and with a CAGR if xx% between 2019-2025.
Ms Simson said farmers in many of our overseas competitor markets enjoy access to mature and deep financial risk management markets.
Financial Risk Solutions President Jim Wilson and his staff will maintain operations, retain the Financial Risk Solutions and Chill-Pro names, and remain headquartered in Chicago.
He added that he has a responsibility as commissioner to be certain that insurers address financial risks in the reserves they use to pay claims.
This Financial Risk Management solution is expected to enable the bank to perform asset and liability management, liquidity risk, market risk and capital calculations at head-office level.
Twenty percent of respondents said they're operating without a clear financial risk management strategy.
In this paper we posit that SFAS 158 will have a more negative impact on firms perceived to have higher financial risk. We use two liquidity ratios: the current ratio and the cash to current liabilities ratio, and two leverage ratios: the long term debt to total assets ratio and the times interest earned ratio as proxies for financial risk.
Increased business risk means that you must more carefully manage financial risk, which is the likelihood that your company will have enough cash available to meet obligations to debtors.
Although the authors' intended audience is practitioners in financial risk management, the book is also a useful tool for graduate students in the field because it provides concise simulation methodologies for many financial risk models.
Based on national cultural differences, it was hypothesized that clients in Kuwait would have a lower financial risk tolerance than the clients in the other countries sampled.
Her book isn't intended to be a technical treatise; rather, it's a high-level overview of the various financial risk areas designed to provide a fundamental framework of understanding.
But most said they had been put off by the financial risk or the lack of money.

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