Risk means that there is a chance that you won’t receive a return on your investment. It is an exposure to danger to your bottom line. When you are in business, you need to consider the kinds of events that could pose a risk to your business and take steps to mitigate them. The possibility that a company will have lower than anticipated profits or that it will experience a loss rather than a profit. Business risk is influenced by numerous factors, including sales volume, per-unit price, input costs, competition, and overall economic climate and government regulations. A company with a higher business risk should choose a capital structure that has a lower debt ratio to ensure that it can meet its financial obligations at all times. Chapter by chapter, this book discusses the history of risk management and more recently developed enterprise risk management practices, and how you can prudently implement these techniques within the context of your underlying business.
