This is the risk when a company will not be able to meet its responsibilities to pay back its debts. It is a possible change in an investment’s ability to return income and principal. The more debt a company holds, the higher its potential financial risk.
Financial Risk
This is the risk when a company will not be able to meet its responsibilities to pay back its debts. It is a possible change in an investment’s ability to return income and principal. The more debt a company holds, the higher its potential financial risk.