Financial Leverage Risk
All Financial Risks
The risk of financial distress or some form of insolvency or administration due to high financial leverage. High financial leverage will usually be as a result of excessive borrowings or external creditors that the company is unable to sustain, repay or refinance over a period of time.
Other risk categories that can give risk to Financial Leverage Risk will be Revenue Risk, Cash Flow Risk, Asset Valuation Risk and Refinance Risk.