Risk analysis and assessment is typically targeted at the key strategic elements of a business (see strategic assessment) and involves the stated risk being diagnosed and then ranked for severity of business impact. Risk therapy is then designed to mitigate or eliminate the risk.
It is crucial that those risks that are classified as “commercially fatal” receive the highest priority of action. These are often financial operations such as ‘debtors’ or may be dropping sales and/or diminishing gross margins.
Any item that significantly lowers cash intake beyond monthly direct expense costs is a potential risk to the company’s financial welfare.