--%>
Assignment Help - homework help

Describe difference between business risk and financial risk

Describe difference between business risk and financial risk?
Business risk refers to the uncertainty company hold regarding to its operating income (also termed as earnings before interest & taxes or EBIT). Business risk is brought onto sales volatility & intensified through the existence of fixed operating costs.
Financial risk is the added volatility of net income caused by the presence of interest expense. Firms which have only equity financing have no financial risk because they have no debt on which to make fixed interest payments. On the other hand, firms which operate primarily on borrowed money are exposed to a high degree of financial risk.

   Related Questions in Finance Basics

  • Q : How the production of public goods will

    Normal 0 false false

    		•
  • Q : Define the term Program Cost Accounting

    Program Cost Accounting (PCA): The level of accounting which identifies costs by activities executed in achievement of a purpose in contrast to the traditional line-item format. The aim of accounting at this level is to generate cost data adequately a

    		•
  • Q : Describe benefits of the JIT inventory

    Describe the benefits of the JIT inventory control system? The just-in-time (JIT) inventory control system lowers inventory carrying costs & tends to raise quality.  

    		•
  • Q : Causes and solution to international

    causes and solutions to international bank crisis

    		•
  • Q : Equilibrium GDP for the open economy

    Normal 0 false false

  • Q : Define Limited-Term Position

    Limited-Term Position (LT): Any place that has been authorized only for a particular length of time with a set termination date.Limited-term positions might be authorized throughout the budget procedure or in transactions approved by the D

    		•
  • Q : What are the Changes in Authorized

    Changes in Authorized Positions (“Schedule 2”): This is a schedule in the Governor’s Budget which reflects staffing changes made following to the adoption of the present year budget and enacted legislation. This planned document modi

    		•
  • Q : What is Uniform Codes Manual Uniform

    Uniform Codes Manual (UCM): It is a document sustained by the Department of Finance that sets standards for codes and different other information employed in state fiscal reporting systems. Such codes recognize, for illustration, prog

    		•
  • Q : Describe who owns a credit union

    Describe who owns a credit union? Credit unions are owned through their members. While credit union members put money in their credit union, they are not "depositing" the money technically.  In spite of, they are purchasing shares of the cr

    		•
  • Q : Impact on India on Global Economic

    Explain the impact on India on Global Economic crisis ?

    		•