Risk analysis

Question 1

Different types of risk

Answer 1

• strategic
• operational
• financial

Question 2

What are strategic risks?

Answer 2

Risks associated with the long term strategic objectives of the business

Question 3

What are operational risks?

Answer 3

The risks on how the business will operate

Question 4

What are financial risks?

Answer 4

Risks to the finances of the company

Question 5

Good things to consider when talking about risk

Answer 5

Operational gearing
- proportion of fixed costs to variable

Financial gearing
- proportion of debt to equity