Introduction to Risk Analysis

Summary

Risk analysis is a process which helps the management to find the balance between achieving business objectives and the requirement to protect the assets of the business. It provides a way to optimize operations, leading to an equilibrium of profitability and risk. As external scrutiny increase and stakeholders have begun to question management decisions due to rising scandals and bankruptcy, risk analysis has become a potent tool to pacify them. It demonstrates management’s ability to carry out due diligence and exhibits that they are meeting their fiduciary duty and protecting shareholders wealth. Thus it plays a pivotal role in management’s decision making and is crucial for strategic planning and implementation. Risk analysis has become an important part of the corporate world nowadays and to survive businesses need to know how to implement it!