Analyzing the financial risk involved stands to benefit both the borrower as well as the creditor. Financial risk revolves around potential business and financial risks assessment and evaluation. For this purpose, Actuarial techniques are often used for analysis. Conclusions are drawn from existing data and extrapolated into the future. Probabilities are assigned to various possible events and risk is also accessed through time series analysis. It provides different scenarios regarding one’s return on investment (ROI). It helps make financial decisions and takes into account all available information pertaining to a decision that involves company’s assets.
