Total risk is equal to business risk plus financial risk. Companies then manage total risk by balancing the two. A low risk business like a bank, can take a lot of financial risk. Banks are often financed with up to 92% debt. Deposits are amounts owed by the bank and therefore a form of debt. Up until the financial crisis, only a handful of banks had failed in the previous 12 months. On the other hand young high tech companies know that they have high business risk. These firms fail all the time. Therefore they finance with little or no debt.
What industry has both high business risk and high financial risk?© BrainMass Inc. brainmass.com October 25, 2018, 9:26 am ad1c9bdddf
Business risk is the risk which is present in the company's operations. It may refer to the possibility of insufficient profits or rather no profits to run the normal operations. Such high uncertainties may happen due to change in tastes, increased competition, change in input prices etc. Financial risk is the risk ...
This solution gives a 217 word explanation of which industry has both types of risk at a high level.
On Your Mark is preparing to release its first Annual Stockholder Report since the company's recent initial public offering (IPO). The accounting department has already prepared and provided the financial statements and ratios (see below) for the most recent year. Now all the division managers are meeting to help create the written analysis portions for the annual report keeping in mind all the stakeholders who will be reading this information. ( i.e.,shareholders, regulators, investors, security analysts, credit rating agencies, etc.) Using what you know about On Your Mark from the scenario above, the financial documents, and details from your previous tasks, create On Your Mark's first Annual Stockholder Report for its' stakeholders. Provide as much detailed analysis as possible to your shareholders for each of the following areas, keeping in mind how the users of this information are likely to use it:
1. Assess the internal and external risk factors for the firm
2. Provide an analysis of the financial condition for the firm
Based on the attached financial statement I have to give any analysis on the two topics listed with References....I need some information as to the financial status of the company based on the attached financial statements. I also need some examples of the internal and external risk factors they face. thanksView Full Posting Details