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Class 12 Tuition > Learn Business Studies > What is business risk? What is its nature?
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What is business risk? What is its nature?

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Business risk is the possibility a company will have lower than anticipated profits or experience a loss rather than taking a profit. Business risk is influenced by numerous factors, including sales volume, per-unit price, input costs, competition, the overall economic climate and government regulations....
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Business risk is the possibility a company will have lower than anticipated profits or experience a loss rather than taking a profit. Business risk is influenced by numerous factors, including sales volume, per-unit price, input costs, competition, the 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 it can meet its financial obligations at all times. Business risk may be defined in terms of the possibility of occurrence of un-favourable events; which maximize chances of losses and minimize chances for gain, in business. read less
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