Author(s): Sungh Chou
Financial risk analysis and management are critical aspects of today’s business environment, guiding organizations through a complex landscape of potential financial pitfalls. By identifying, analyzing, and mitigating various financial risks, companies enhance resilience against uncertainties that could negatively impact cash flow, profitability, and long-term sustainability. This article provides an overview of key financial risks—including market, credit, liquidity, and operational risks—and examines strategies for effective risk management. Emphasizing tools and techniques such as Value-at-Risk (VaR), scenario analysis, and the importance of a strong risk culture, it highlights the essential role of risk management in strategic decision-making and overall financial health.