MANAGEMENT

Detailed explanation-1: -How Do Analysts and Investors Use Capital Structure? A company with too much debt can be seen as a credit risk.

Detailed explanation-2: -A company’s financial risk is related to the company’s use of financial leverage and debt financing, rather than the operational risk of making the company a profitable enterprise.

Detailed explanation-3: -Financial risk is an unsystematic risk because it does not impact every company. It is specific to each company as it depends on an organization’s operations and capital structure.

Detailed explanation-4: -This is included in the category of financial risk. There are at least 4 risks included in it, namely income risk, expenditure risk, asset or investment risk, and credit risk.

Detailed explanation-5: -Slumps and Collateral A key risk of borrowing now and leveraging future cash flow is that sales could slump at some point, making it difficult to make payments. This can lead to missed payments, late fees and negative hits on your credit score.