3) Financial Risks Financial risks relate to
1. the possibility of having insufficient cash to meet expected obligations,
2. lower than expected profits, and loss of net worth.
3. Sources of financial risk commonly result from the production and marketing risks described earlier.
4. In addition financial risks may also be caused by increases in key input costs,
increases in interest rates,
excessive borrowing,
lack of adequate cash or credit reserves, and
changes in exchange rates.