Operating Risk

Posted in Finance, Accounting and Economics Terms, Total Reads: 896
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Definition: Operating Risk

Operating risk is a type of risk which a company faces due to the execution of its business functions. It is mainly the risk of loss due to company’s internal system, process and people. It is very hard to determine. Operating risk is different for different companies as it is company specific.

It does not includes financial risks (i.e. Risk arising from unavailability to get funds) or change in market factors (market risk).

example:

A loss faced by litigations against the company or fraud by the head of the company can be classified as operating risk.


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