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Live Chicken Warning Urban health regulations needed on backyard chicken coops, researchers say

With backyard poultry ownership in urban areas of the US increasing in recent decades, cities should adopt policies to reduce the risk of infectious disease from contact with live chickens, according to a publication led by a Boston University School of Public Health researcher.

Chickens can carry bacteria such as Salmonella and viral infections such as avian influenza, and urban regulation of backyard poultry ownership can help to reduce the risk of human infection, the researchers say in an article in the journal Public Health Reports.

Jessica Leibler, a BU assistant professor of environmental health, and colleagues say local ordinances should incorporate specifications on a range of health measures, including manure management, slaughter and disposal of sick poultry, veterinary care, consumer education, and registration of households with poultry.

“The reintegration of live poultry into the urban environment poses risks to human health due to zoonotic disease transmission from poultry to humans,” the authors say. “Noncommercial contact with poultry has been associated with numerous multistate salmonella outbreaks in recent years and poses risks for transmission of other bacterial and viral pathogens.

“The local nature of poultry regulation poses challenges for systematically managing infectious disease risk from backyard poultry, and many US urban ordinances do not fully address the infectious disease risks to humans associated with this practice.”

Leibler and colleagues from BU’s College of Health & Rehabilitation Sciences: Sargent College and College of Arts & Sciences and from George Washington University assessed local ordinances in the 150 most populous US cities for regulations related to noncommercial poultry ownership, using online resources and communications with government officials. They also performed a literature review, using publicly available data sources, to identify human infectious disease outbreaks caused by contact with backyard poultry since 1990.

Annually, an estimated 1.4 million people in the US are infected with nontyphoidal salmonella serovars. Exposure to noncommercial live chickens and eggs has been the source of 45 documented salmonella outbreaks since 1991, with 1,581 documented illnesses, 221 hospitalizations, and five deaths, the authors say.

Despite these risks, many backyard chicken owners are unaware of infectious disease risks from poultry contact and do not engage in appropriate hygienic behaviors, Leibler and colleagues say. A 2010 US Department of Agriculture study suggested that more than 50 percent of urban poultry owners were unaware that live poultry contact poses infectious disease risks for humans, and nearly 25 percent reported not washing hands after handling live poultry.

Of the cities reviewed, 93 percent permit poultry in some capacity. Most urban poultry ordinances share common characteristics focused on reducing nuisances to neighbors. But many of the ordinances do not address the pathways of transmission relevant to poultry-to-human transmission of pathogens, such as manure management, the authors found.

Among the study’s recommendations are: requiring owners to compost poultry manure in sealed containers; prohibiting slaughter at the home; requiring veterinary care in the event of bird illness and reporting of rapid die-offs within the flock 
to city officials through a website or hotline; disposing of dead birds properly; and requiring owners to participate in educational programs, such as online modules, about hygiene and sanitation in conjunction with the permitting and renewal process.

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Strategies And Tactics Of Risk Management

Following a robust and well−planned risk management strategy has become more important now than ever. Especially after the COVID pandemic, organizations have been focusing on risk management for all projects. Whether they are developing a simple mobile app or are planning a business expansion in the international market, risk management is essential.

The project planning is incomplete without identifying the potential risks that might arise from deploying new strategies. How quickly and effectively you plan risk management will determine how well you can cope with the unforeseen and how your business performs in tough times. Risk management can involve strategies to mitigate these risks or a detailed backup plan in case the existing strategy fails. Keep reading to learn more about risk management.

A risk management strategy is a set of procedures and plans to address different kinds of risks. Businesses of all sizes and natures can benefit from a risk management strategy. Note that a risk management strategy isn’t just a series of steps, but an ongoing process where you identify the risks, devise a plan to mitigate them, and monitor your performance at every stage of a project to ensure the best results.

Steps for Developing a Risk Management Strategy

It’s important to review risks at different stages of the project, especially when it’s in the development stage, and follow the right steps to manage those risks.

Identify risks

Risks can be defined as vulnerabilities that might pose a threat to the organization, employees, assets, and ongoing projects. Your focus should be on pointing out the areas that are red flags and might disturb your workflow, resources, and budget. You must follow the proactive approach, where you identify the risks beforehand instead of waiting for these red flags to turn into a big problem. Once you have identified risks, the next steps get easier.

Assessing risks

Once you have identified and documented each risk, the next step is for the audit team to assess the severity of these risks and determine the impact they have on your organization. They also assess if the risk can turn into a big cause for concern in the future and if it will affect the company’s annual revenue.

Based on the risk assessment, the manager and the team can prioritize these risks. You must document these risks and, depending on the nature of your business, review them annually. Risk assessment strategy varies from company to company. Some conduct a thorough risk assessment when executing a complex project, while others make it a regular strategy.

Addressing risks

Risk assessment or evaluation should give you a clear picture of how the risk will have a severe impact on your project or business. Based on this, you can set your priorities and work on the risks that pose a bigger threat to your organization. At this stage, you need to build a contingency plan so that you don’t face any surprises as you move ahead with your project.

You work with your team and stakeholders to develop a robust management strategy that can address the potential risks or mitigate them to some extent. If a risk seems too challenging to be fixed, you can always have a backup plan that shows you how to execute the same process with a different approach.

Monitoring risks

Now, you know what to do if a risk becomes a problem in your project development and how you are going to mitigate them. The next crucial step is monitoring these risks. Risk monitoring is a continuous process where you must assess risks and figure out the most practical solutions regularly. Risk monitoring will ensure that the risks do not turn into a problem that you can’t handle with the available resources.

Why your Business Needs a Risk Management Strategy?

Risk management does much more than address a simple risk. A thorough risk management strategy helps you identify your company’s strengths, weaknesses, opportunities, and threats. Let’s check out the few steps for managing risks effectively.

Business continuity

Unprecedented risks have become a common phenomenon after the global pandemic. Even if you think your company is prepared to address these challenges, the truth is certain risks can occur at any time and can shut your business for good. It can be an operational risk, like a machine failure, or a more complex one, such as a supplier ending their services with you. Certain risks can affect your business, employees, and even customers. Cybersecurity threats, for example, can result in data leaks which might take your business down.

Customer satisfaction

Your brand, logo, digital presence, and every part of your business is your asset. Your customers value these things when they do business with you. When you deploy an effective and well−planned risk management strategy, your customers feel confident about working with you. Not only customers but your investors and employees will also consider your risk management strategies. Know that contingency plans are a must for all companies. It gives your stakeholders and team a sense of security that if the original plan doesn’t work, they have a backup plan in place.

Increased profitability

The long−term objective for most businesses is increasing their revenues. You don’t want your team’s effort going down the drain just because of a breach that could have been avoided if you had a risk management strategy. Even a small security breach can lead to lengthy investigations, legal fees, and a lot of resources in recovering the lost data. To increase your profit and achieve your long−term goals, it’s important that you practice a proper risk management strategy.


Risk is an inevitable part of every business. While you can’t predict or control them ahead of time, there are ways to address them effectively. A risk management strategy shows you the right ways to deal with different kinds of risks and mitigate them. Once you have identified and assessed risks, you can devise a plan to avoid or transfer them.

Celebrate Year Of The Rooster With The Best Chicken Science

Saturday is the first day of the Chinese Lunar New Year, and celebrations have already started around the globe. This year is the Year of the Chicken (or Rooster, if you will). And what better way to celebrate than with a roundup of chicken science?

Chickens are more than meals on our table. From sacrificing embryos for the early research of developmental biology, to serving as handy dinosaur stand-ins for research, chickens deserve more than just their reputation as a protein source.


Domestic chickens, like pigeons, navigate with built-in compasses, or biological sensors that detect the magnetic field of the Earth. As researcher Wolfgang Wiltschko told LiveScience, some scientists believe that chickens’ magnetic sensors probably lie somewhere in their eyes, because chickens seem to need short wavelengths (like blue light) to navigate. In Wiltschko’s experiment, their sense of direction was lost under longer wavelengths.

So next time when you meet a chicken that’s crossing the road, don’t honk at it. Be patient. It knows where to go. Probably.

Running with a steady head


A handy substitute for a dinosaur


Watch the gif. This might be how dinosaurs took a stroll.

Chicken are actually the last living dinosaurs, so researchers decided to stick a fake tail onto some chick butts in order to study how those ancient ancestors might have walked. As the researchers announced in the abstract of their PLOS paper: “Here we show that, by experimentally manipulating the location of the centre of mass in living birds, it is possible to recreate limb posture and kinematics inferred for extinct bipedal dinosaurs.”

Chicks raised with the fake tail indeed changed their postures, and had a more vertical femur structure as result, confirming “a shift from hip-driven to knee-driven limb movements through theropod evolution.” Not too surprisingly, this groundbreaking first-of-its-kind study won the Ignobel Prize for Biology in 2024.

Becoming “Chickenosaurus”

Make way for the Chickenosaurus. Pexels

Resurrecting dinosaurs by tweaking the chicken genome is not a new idea. Last year, Chilean researchers successfully grew a dinosaur-like bone structure in the legs of a chicken, making some solid progress towards the Chickenosaurus goal—an ambitious idea envisioned and popularized by the American paleontologist Jack Horner.

However, (as humble and cautious as scientists always are) the authors of that study told Motherboard that Chickenosaurus was not their ultimate goal. They just wanted to better understand how birds evolved from earlier dinosaurs.

Establishing the pecking order


Chickens don’t usually peck buttons in a power plant, except in the Simpsons. But they do peck to establish a social order, a hierarchy within the flock for access to food and water. The pecking order of a flock is often set in their chick stage, but can also be slightly changed with later fights.

Thorleif Shjelderup-Ebbe, a Norwegian zoologist, was the first one to coin the term pecking order from his close observations of chicken flocks. Social hierarchy has also been found in other living organisms such as insects, fish, and primates.

The ultimate form of rejection

Female chickens have an amazing birth control method—postcopulatory sexual selection. pexels

Chicken social status actually matter a lot. Hens selectively reject sperm from low-status roosters. If the mating male is low in rank, researchers found, the female is more likely to eject his sperm.

“It is beginning to appear females can play a much more subtle, but powerful role in the battle for fertilization,” the study author Tommaso Pizzari of Oxford University told LiveScience.

The Cosmopolitan Chicken


The idea of breeding a Cosmopolitan Chicken—a hybrid of all types of chicken in the world—is one of the more grandiose chicken-related endeavors. Rather than using chickens for food, Belgian artist Koen Vanmechelen thinks of them as a symbol of multiculturalism and diversity, which led him to start the Cosmopolitan Chicken Project (CCP) in the 1990s.

“The CCP is a mirror. Every organism needs another organism to survive,” says Vanmechelen on the CCP website. The Cosmopolitan Chicken is up to its 20th iteration now, and such hybrid chickens with diverse DNA might be healthier than purebred poultry, according to Modern Farmer.

All this human inquiry is great, but what do the chickens think? As the Year of the Chicken begins, some of us might be curious about what intelligence and emotional depth these creatures have. Here’s a starting point for that intellectual journey: Neuroscientist Lori Marino, science director of the Nonhuman Rights Project, recently penned a review article called “Think Chickens”.

Example Of Risk/Reward Ratio (With Excel Template)

Definition of Risk/Reward Ratio

The Risk/Reward Ratio is measured by the trader/investor for the level of risk taken on investment against the level of income and growth achieved on investment. The ratio measures probability and level of profit against probability and level of loss taken by the investor.

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Every trader/investor, according to his /her risk appetite, generally decides the Risk/Reward ratio. In general high-risk results in high rewards, but there is an investment option where this statement is not true. This ratio helps the investor to make the decision of investment from investment options depending on the level of returns against the level of risk involved in case investment does not move in the expected direction.


Risk to Reward Ratio = Risk / Reward

In general, the lower ratio is better than the investment.

Example of Risk/Reward Ratio (With Excel Template)

Let’s take an example to understand the calculation in a better manner.

You can download this Risk/Reward Ratio Excel Template here – Risk/Reward Ratio Excel Template

Example #1

A decision to invest $400,000. He is willing to take 10-15% of the risk on a short-term investment. He shortlisted two stocks one of which he prefers to invest. They are either Microsoft Corporation at the current price of $172 per share or Apple Inc. at the current price of $320 per share. Mr. A study and analyzed both stock trends and realized that Microsoft Corp. share price can go up to $225 per share and Apple Inc. share price can go up to $400 per share in a period of 3 months. Since it is a stock market investment it involves the risk of share price goes down instead of up. He is ready to take risks up to $48000.


Risk is calculated as

Risk/Reward Ratio is calculated using the formula given below

Risk to Reward Ratio = Risk / Reward

For Apple Inc.

Risk/Reward Ratio =$35 / $ 80

Risk/Reward Ratio = 0.44

Risk/Reward Ratio  = $19 / $53

Risk/Reward Ratio  = 0.36

Above, calculation, suggests Microsoft is the better investment as per the Risk/Reward ratio. However, it is up to Mr. A to decide which investment he prefers or he may choose to invest in both companies by dividing his investment.

Difference between Risk and Reward

Basis of Comparison



Definition Risk is the probability and level of loss of investment taken by the investor. The reward is returns or growth earned on investment by the investor during period

Source Risk is a result of the category of asset, investment and trading strategy, Economic conditions affecting investment. The reward is a result of Interest, dividend, increase in the underlying value of the investment.


Systematic Risk: Risk, which cannot be avoided, affect almost all market investments. E.g. interest rate, exchange rate, inflation, political.

Unsystematic Risk: Specific type of risk affecting a particular investment or industry. E.g., management change, competition, performance.

Growth: The price of asset increases resulting in the growth of the underlying value of the investment.

Income: Reward earned through interest, dividend on investment.

Managing There are 4 way to handle risk

Avoid: After considering the level of risk avoid investment.

Reduce: Change in trading/investment strategy, hedging, Diversifying investment, cutting off loss-making investment.

Transfer: Transfer of risk can be done through insurance by paying the premium.

Accept: Understanding and accepting risk for better rewards.

Rewards are managed by

Reinvestment: Income earned by selling an investment or through dividend and interest can be reinvested in different asset categories.

Expand: in business, expansion is a way to invest in the business for expansion and more profit.

Diversification: Portfolio upgraded and managed by diversifying investment in various categories.

Example Mr. Rock decides to invest in stock A at the current price of $100 he expects the price of the stock can rise up to $120 in 1 month while he decides he should not make the loss of more than $10 in this stock. $10 is a risk taken by Mr. Rock in this investment in case stock moves down. Mr. Rock decides to invest in stock A at the current price of $100 he expects the price of a stock can rise up to $120 in 1 month while he decides he should not make the loss of more than $10 in this stock. Stock price moves up to $120 in a month this earning of $20 on $100 investment is the reward.

Below we will learn about the benefits and limitation for the same:


Risk appetite: Every individual has a different risk level of risk capacity. Risk/Reward ratio helps them to make selection and decision from various investment option according to capacity and expected returns.

Investment Decision: Risk/reward ratio help investor to make investment decision from various investment options like mutual funds, stocks, hedge funds, etc.

Risk-returns estimates: Even if investment provides returns it is important to calculate whether returns earned on investment are worth in comparison with the risk taken. If returns are not as expected compare to risk, an investor can decide whether an investment is worth or not. For e.g. Investor can decide to make an investment in bonds, debentures, fixed deposits that have less risk but will also generate less return on investment, or other options likes the stock, mutual funds which can generate high returns but includes the risk of loss. Investment decision depends on an investor’s expectation and risk capacity.

Risk Management: Risk can be managed by four ways i.e. avoid, reduce, transfer and accept. With the help of risk to reward ratio investors can manage their portfolio to maximize returns and minimize risk level through various options. Trader trading in various financial instruments can limit his loss with stop-loss by using risk to reward ratio.

Not completely accurate: Risk/Reward ratio is not always accurate; the investor has to make the decision based on risk capacity and on certain assumptions on price movement. Technical and fundamental analysis help in making better analysis of stock understand risk/reward ratio but they are not completely accurate, and still include assumptions.

Not Certainty of movement: Risk to reward ratio based on an assumption of certain movement but in reality in the market financial instrument does not necessarily move in expected or opposite direction. Many time if the stock remains stagnant, which will turn the investment into a dead investment without either profit or loss.

Conclusions – Risk/Reward Ratio

Risk/Reward ratio is an important tool for trader/investor to understand the level of risk involved in investment decisions compared to returns. Lower the risk/reward ratio i.e. below 1 is considered as good ratio since the return on investment outweighs the risk. In general, short-term investors and traders use this ratio to select from a variety of categories of investments. In case the price does not move in the expected direction this ratio, helps them to limit their losses.

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Comparison Of Iphone Ownership Cost On At&T, Verizon, Sprint And T

With yesterday’s announcement that Apple’s iPhone 5 will finally start selling through T-Mobile on April 12, we can now compare the total cost of ownership across the nation’s four largest wireless carriers: AT&T, Verizon, Sprint and T-Mobile.

In figuring out how much one saves on T-Mobile over two years versus other carriers, Zagg concluded that T-Mobile’s contract-free iPhone 5 comes in at a very cool $580 cheaper over two years. However, the difference evaporates if you switch your significant other or an entire family of four to the nation’s fourth-largest carrier…

Zagg in a blog post cautions that its math assumes T-Mobile’s unlimited data tier (the carrier offers three tiers of data: 500MB, 2GB and unlimited).

Sprint by default offers only unlimited option and claims not to throttle data.

Verizon and AT&T, as you know, no longer have unlimited data so Zagg used the current pricing for their respective Share Everything and Mobile Share plans, each offering four gigabytes of cellular data per month.

Based on these terms, T-Mobile’s no-contract iPhone 5 at a total of $2,259.99 over two years comes in at a $580 cheaper than the total cost of owning the subsidized iPhone 5 with the obligatory two-year service agreement with AT&T, Verizon and Sprint, each coming in at the same $2,389.99.

Here’s your chart.

Should you opt for two gigabytes of data instead of T-Mobile’s unlimited tier, you’ll be saving an additional $240 over the two years, resulting in the total saving of $820 – just nine bucks short of the 64GB cellular iPad 4.

John Brownlee of Cult of Mac notes that there’s one carrier that is cheaper than T-Mobile: Walmart’s in-house Straight Talk.

Basically, the iPhone 5 gets cheaper and cheaper to have for 24 months the smaller the carrier gets. Cricket, Straight Talk and Virgin are still cheaper options if you don’t mind buying your iPhone 5 for full price at the start of your contract.

On the downside, LTE doesn’t work on Straight Talk.

T-Mobile yesterday formally flipped the switch on LTE in Baltimore, Houston, Kansas City, Las Vegas, Phoenix, San Jose, and Washington DC. The Deutsche Telekom-owned telco is shooting for a hundred million LTE customers by mid-2013 and 200 million people nationwide by year’s end.

The Verge ran more complex calculations involving families.

If you along with your significant other plan on switching to T-Mobile, you’ll save a tiny amount over two years compared to Verizon and AT&T.

While there’s no denying that T-Mobile’s new plans are the cheapest around, it’s not the slam-dunk the carrier would have you believe.

For a couple of two, it’s about $4,000 for shared data on Verizon and AT&T, or the same price with unlimited data on T-Mobile. 

They produced this handy comparison chart.

Whichever way you look at it, T-Mobile is the cheapest of the bunch, for individuals.

In considering your choice of carrier, you should remember that Verizon’s and AT&T’s LTE coverage is much larger than T-Mobile’s. On the other hand, there’s no escaping from those two-year deals at AT&T or Verizon.

By comparison, T-Mobile lets you cancel your service anytime your want, though you’ll of course have to pay up for the remaining monthly installments.

“T-Mobile customers have to make up the difference between what they’ve paid so far and their old phone’s retail value if they want to try a new device,” notes the publication.

As a reminder, T-Mobile sells the iPhone 5 with its new Simple Choice Plan for $99.99 down and $20 per month for 24 months. The devices is not sold tied to a service contract – that’s why the cost of the hardware is spread across monthly installments plus that $99.99 up front payment.

That goes against the industry’s practice of  subsidizing the hardware by requiring people to sing a long-term service agreement. In a way, T-Mobile is basically giving you interest-free financing for the hardware and lower service cost than rival telcos.

If you look at the total cost of the iPhone 5 hardware at T-Mobile, you’re paying a total of $580: $99.99 down payment + $20 per month over the next 24 months. This is actually $69 cheaper compared to Apple’s asking price for the unlocked iPhone 5 ($649) through its online store.

The carrier’s no-contract iPhone 4/4S is a $75/$1 cheaper versus the online Apple store. T-Mobile is also the first major U.S. telco to support HD Voice (or Wideband Audio) on the iPhone 5.

Unfortunately, their tremendously useful WiFi Calling feature which routes voice calls through nearby WiFi hotspots, in turn saving cellular voice minutes, won’t be available on Apple’s device at launch.

Financial Risk And Its Types

Financial risk is the probability of losing money on an investment or business endeavor. Operational risk, credit risk, and liquidity risk are just a few examples of the various types of financial hazards. Financial risk is the possible loss of capital to an interested party.

What are the Risks?

Risk is the possibility of an unanticipated or negative consequence. Risk can be defined as any action or behavior that raises the possibility of a loss of any kind. There are various risks that a business could face and need to handle. Business risk, non-business risk, and financial risk are the three categories into which hazards are generally divided.

Business Risk

To increase earnings and shareholder value, businesses take these kinds of risks on their own. For instance, businesses launch new products with high-risk marketing strategies to boost sales. The possibility of a product or service failing and causing losses to the owner and the shareholders, is called business risk.

Non-Business Risk

Businesses are unable to control this category of hazards. Non-business risk is a word used to describe risks that result from political and economic imbalances.

Financial Risk

As the name suggests, financial risk refers to a risk that could result in a company losing money. Financial market instability and losses brought on by changes in stock prices, currencies, interest rates, and other factors are the main causes of financial risk.

What is Financial Risk?

The probability of financial loss while making an investment or starting a business is called financial risk. Operational risk, liquidity risk, and credit risk are a few of the more prevalent and distinct financial hazards.

A form of risk known as financial risk has the potential to cause interested parties to lose money. Governments that are unable to control monetary policy may end up defaulting on bonds or other debt obligations. Corporations may fail in an endeavor that puts a strain on their finances while also running the risk of defaulting on the debt they take on.

The inability to control monetary policy and/or other debt-related difficulties is referred to as financial risk in government sectors. Learn more about the relationships between different sectors, such as business, government, markets, or individuals, and financial risk.

Types of Financial Risks

Financial risk is a result of market fluctuations, which can be influenced by a variety of causes. As a result, we can divide financial risk into a variety of categories, including market risk, credit risk, liquidity risk, operational risk, and legal risk.

Market Risk

Changes in the prices of financial instruments are what cause this type of risk to arise. There are two types of market risk: directional risk and non-directional risk. Changes in stock prices, interest rates, and other factors can all have an impact on directional risk. On the other side, the non-directional risk may be connected to volatility threats.

Credit Risk

This type of risk arises when one does to fulfill their obligations to counterparties. Two types of credit risk are sovereign risk and settlement risk. Foreign exchange policies that are challenging to implement often result in sovereign risk. However, when one party pays while the other does not uphold the commitments, settlement risk arises.

Liquidity Risk

This kind of risk results from a failure to complete transactions. Liquidity risk comes in two flavors: financing liquidity risk and asset liquidity risk. When there aren’t enough buyers or sellers to fill buy and sell orders, respectively, liquidity risk arises.

Operational Risk

Operational failures like bad management or technology mistakes cause this type of risk. Two types of operational risk include fraud risk and model risk. Lack of controls and improper implementation of models both increase the risk of fraud.

Legal Risk

This type of financial risk results from legal consequences like lawsuits. Legal risk arises whenever a business must deal with monetary damages resulting from legal actions.

Risks to Businesses’ Finances

Why do firms run the danger of losing money? Multiple macroeconomic factors, shifting market interest rates, and the potential for default by sizable organizations or sectors can all contribute to financial risk. People who own businesses incur the danger of losing money if they make choices that will make it difficult for them to make payments on their obligations or earn an income. For their constant expansion, businesses frequently need to look for funding from other sources. The company or business seeking the money and the stakeholder investing in the company’s business both face financial risk as a result of this funding requirement.

Market Risks Associated with Finance

Given the variety of factors that might affect them, financial markets are frequently a center of financial hazards. When a crucial market sector experiences a financial crisis, it has an impact on the overall market’s financial situation. The global financial crisis of 2007–2008 provides evidence of market risk. Businesses started to fail, investors suffered huge losses, and the government was pressured to change its monetary policies.

Benefits and Drawbacks of Financial Risk

The benefits and drawbacks are listed below −


Growth − Risk is a necessary component of doing business, and organizations may need to obtain money through debt to grow and enter a new market. Although it may seem like a burden to the business, financial risk must be accepted if a company is to perform well and increase revenues through development and expansion.

Investors and management should be aware − Investors and management should take specific action to prevent further harm when there is financial risk.

Evaluation of value − Financial risk in particular enterprises or projects aids in income evaluation through the risk-reward ratio, which indicates the value of a given company or project.

It is simple to comprehend the function of risk involved in the organization when financial risk is examined using various ratios.

Can have catastrophic effect − When it comes to the government, financial risk can result in bonds and other debt from financial institutions defaulting, which might harm the nation and the world economy in the long run.

Not under our control − Financial risk that cannot be controlled by a company operating in a certain market, such as risk resulting from international variables, natural disasters, war, changes in interest rates, and changes in governmental policy.

Long-term consequences − If the financial risk is not properly managed at the correct time with the right tactics, it can harm the business’s finances and reputation as well as cause investors and lenders to lose faith in it. It can be difficult for a business to recover from such setbacks.

Impact − The entire industry, market, and economy may be affected by financial risk.

The bottom line

Individual, business, and governmental finances all take some level of financial risk in order to grow. If used and handled properly, such risk can be a sign of progress and result in success. Financial leverage measures, such as interest coverage ratios, debt-to-asset ratios, and debt-to-equity ratios, are used in business to determine how much debt a company is carrying in the market. When managed with revenue growth and business expansion, financial risk can be beneficial. However, if not handled correctly, it may result in the company’s bankruptcy and loss for the business’s investors and lenders.

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