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How overall financial risk is calculated

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How overall financial risk is calculated

Posted by Vidya Sagar Verma 4 years, 7 months ago

CBSE > Class 12 > Business Studies

1 answers

Meghna Thapar 4 years ago

Business risk can be measured by the variability in EBIT (as per situation). Financial risk can be measured by the financial leverage multiplier. Business risk is related to the operations of the business. Financial risk is related to the capital structure of the business. Risk analysis is the study of the underlying uncertainty of a given course of action and refers to the uncertainty of forecasted cash flow streams, the variance of portfolio or stock returns, the probability of a project's success or failure, and possible future economic states.

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