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Definition of 'Financial Risk'
The risk that a company will not have adequate cash flow to meet financial obligations.
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Investopedia explains 'Financial Risk'
Financial risk is the additional risk a shareholder bears when a company uses debt in addition to equity financing. Companies that issue more debt instruments would have higher financial risk than companies financed mostly or entirely by equity.
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Borrowed funds can mean a leg up for companies, or the boot for investors. Find out how to tell the difference.
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Learn how enterprise value can help investors compare companies with different capital structures.
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Learn how to properly use this measure that can help you meet your criteria for risk.
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