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Risk is probability that gain or outcome on investment will defer from what is expected. In financial terms risk is also defined as the chance that gains in an investment's or outcome of the business will differ from an expected outcome or return. This is to say that risk is the possibility that something bad or unpleasant (such as an injury or a loss) will happen.
Risk is uncertainty from expected earnings or outcome which means that risk includes the possibility of losing some or all of an original investment. According to Will Kenton reviewed by Julius Mansa (on July 28, 2020), business risk is the exposure a company or organization face that will lower its profits or lead it to fail.
Risk may apply to situations with property, equipment loss, and human health or even our environment so because of this, it is impossible for a company to completely shelter itself from risk. Therefore, when a company experiences a high degree of risk, the risk may impair with the company/business ability to provide investors and stakeholders with adequate returns.
In today's business, risk takes over most business by impacting either negatively or positively but the good thing is there are ways to mitigate the overall risks associated with operating a business; most companies accomplish this through adopting a risk management strategy.