The Major Kinds of Financial Risk That Companies Face

Market Risk

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Credit risk

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Liquidity Risk

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Operational Risk

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Cybersecurity Risk

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Supply Chain Risk

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Foreign Exchange Risk

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Inflation Risk

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The Major Kinds of Financial Risk That Companies Face

Market Risk

Companies face market risk due to fluctuations in the value of investments, such as stocks and bonds, in the financial markets.

Credit risk

Companies face credit risk when they lend money to individuals or organizations and do not receive the expected payment.

Liquidity Risk

Companies face liquidity risk when they cannot meet their financial obligations due to a lack of liquid assets.

Operational Risk

Companies face operational risk when their business operations are disrupted due to a variety of reasons, such as natural disasters, cyberattacks, and human error.

Cybersecurity Risk

Companies face cybersecurity risk when their sensitive information, such as financial data, is compromised by cyber criminals.

Supply Chain Risk

Companies face supply chain risk when disruptions in their supply chain, such as natural disasters or supplier bankruptcy, negatively impact their operation

Foreign Exchange Risk

Companies face foreign exchange risk when they do business in foreign countries and the value of their currency changes relative to the currency of the country they are doing business in.

Inflation Risk

Companies face inflation risk when their costs increase due to inflation, which erodes their purchasing power.