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# Risk These are Risks that are categorized into two main categories: ## Internal Risk These are risks that are inside the company, meaning the company can control them ### Sub-Categorized As: - System Risk - People Risk - Process Risk ## External Risk These risks are located outside the company,...

# Risk These are Risks that are categorized into two main categories: ## Internal Risk These are risks that are inside the company, meaning the company can control them ### Sub-Categorized As: - System Risk - People Risk - Process Risk ## External Risk These risks are located outside the company, and the company has no control over them. ### Sub-Categorized As: - Natural Disaster - Competitor changing Strategy - Commodity price change ## Financial Risk These involve the company's financing and how it manages its finances. ### Sub-categorized As: - Level of borrowing leverage - Exposure to credit, exchange rates, and interest rates ## Impact Of This: - Higher financial risk tends to increase inherent operational risk at a lower level - Higher levels of borrowing may contribute to business failure ## Credit Risk This involves the risk associated with borrowers (customers or suppliers) defaulting on their loans. ## Market Risk These involve the risk of losses due to changes in market prices, for example: - Share prices - Interest rates - Exchange rates ## Funding Risk Higher funding costs (budget) affect cash flow.