Your friend Sumit wants to start a new business. Therefore, he is interested in knowing
about the business risks and their causes. Explain him the meaning and causes of business
risks.
Answers
Answer:
Business risk refers to the uncertainties that leads to unprecedented profits or losses.
The causes may be as follows:
Natural Calamity: Natural calamities like flood, earthquake, famine cannot be controlled. Such calamities result in a great loss of property and resources.
Economic Causes: These include change in the demand or supply, change in prices, competition, change in technology etc. Rise in lending interest, taxes etc are financial problems which are also considered in these.
Internal causes: These include dishonesty, negligence and absenteeism of employees, internal conflict, inefficient management, strikes and riots etc.
Other causes: These may include fluctuations in exchange rates, political disturbances or any such unforeseen events.
Answer:
Business risk is the possibilities a company will have lower than anticipated profits or experience a loss rather than taking a profit. it is influenced by many factors. for example
Natural causes, like earthquake, flooding etc. which can lead to loss of life and property
Human causes. Human causes of risk refer to negligence at work, strikes, work stoppages, and mismanagement.
Economic causes, can be deflation, inflation which can affect business
Explanation: