Financial Risks Investing : Possiblilities that share holders will lose money if they invested in a company or a project that has many debt and no has potential growth in thier profit or no income. Most companies or coporations face difficulties on company cash flow is inadequate to meet financial obligations, The organisation must alter for a business loan or use debt financing the companies needs.
For the shareholders to get thier shares the company must first repay thier creditors and if the company becomes insolvent investors will lose thier shares. then business will close down or struggle to bounce back. There are many types of financial risks that a organasation will be faced with like market risk, credit risk, liquidtiy risk and legal risks all of this need to be avoided or maintaned accordingly so investors don't find themselves in a situation of losing thier money.
Financial risks investing is what investors loses money in a company that has already in debt. Debt financing and run business is one process where income of the company goes to creditor before going to shareholders. To run a business there will be credit, profit, loss, etc. but flow of money handling and taking correct decision to fulfill the demand according to order or contract runs smooth flow of resources. The financial thread for the investor comes because of some common factors stated below.
Credit Risk: It is because of borrowed money and people who are not able to pay the money. It suffers like decreased income, loss of principle and interest and rise of cost.
Liquidity Risk: This type of risk is because the assets and shares that cannot able to sell fast enough to cut losses in bad time.
Foreign Investment Risk: Change in rules, taxes, exchange value, etc are big thread if a person handle some foreign investment.
Equity Risk: Change in price because of volatile prices in market and suddenly share price gone down and people cannot sell it in the market during his need.
Currency Risk: Investor holding foreign currency may be a big risk when interest rate, rules taxes, government monetary policies gets changed.
Commercial real estate
assistance in all legal relationships of real estate ownership