Overview
People should understand the impact of different types of risk on financial health, whether they’re dealing with personal or corporate finances. The risks involved with personal finance often only impact individuals and families—for example, when determining if you can afford to buy a house or deciding whether to invest in stocks. Financial risks for businesses often affect multiple people throughout the entire company, including individuals who do not work in the finance department. When businesses make finance-related decisions, it is essential that they know how their decisions will impact different aspects of their company.
Prompt
Read the Assessing a Company’s Future Financial Health case study, then write a response.
Specifically, you must address the following rubric criteria:
Systematic and Unsystematic Risk: Explain the differences between systematic and unsystematic risk.
Financial Risks: Describe the potential impacts of the following types of financial risk on the company featured in the case study:
Interest rate risk
Economic risk
Credit risk
Operational risk
Lower Growth Impact: Explain the impact a lower growth in sales could have on the dividend policy and retained earnings for the company featured in the case study.
Higher Growth Impact: Explain the impact a higher growth in sales could have on the dividend policy and retained earnings for the company featured in the case study.
Guidelines for Submission
Your submission should be a 2 to 3-page Word document with 12-point Times New Roman font, double spacing, and one-inch margins. Sources should be cited according to APA style.
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Overview
Whether working with personal or corporate finances, people should be aware of the impact of various types of risk on financial health. When evaluating if you can afford to buy a house or whether to invest in stocks, the dangers associated with personal finance frequently solely affect people and families. Financial risks for organizations may touch a large number of employees throughout the organization, even those who do not work in finance. When businesses make financial decisions, it’s critical to understand how those decisions will affect various aspects of the firm.
Prompt
Write a comment to the case study Assessing a Company’s Future Financial Health.
You must specifically address the following rubric criteria:
Explain the differences between systematic and unsystematic risk.
