Abstract
Modern businesses face inevitable financial risks as part of their normal operations. Factors such as shifting operating environments, increasing competition and the recent global financial crisis have exacerbated these risks. Consequently, financial risks faced by businesses are increasingly complex and volatile. Financial risks are inherent to any business, thus efforts to completely eliminate them are futile. In a market driven economy, startups entice investments via the promise of greater future returns on said investments. This unpredictability in the return of invested capital constitutes a major financial risk. As they grow, improper allocations of valuable capital, along with increased competition, have repeatedly doomed companies as they undergo expansion. Successful businesses have to consider not only how their products meet market conditions and needs, but also how they control their financial risks. Real world examples constantly remind us that proper financial risk control is vital to the long term success of any business. Failure to control these risks at any level of the business will inevitably lead to its demise. To guard against financial risk, it is necessary to understand the sources and characteristics of risk and appropriate control and prevention, sound business risk prevention mechanism, to minimize losses for enterprises to create the maximum benefits. Based on the basic definition of corporate financial risk, including narrow and broad financial risks of financial risk, financial risk, including the main types of financing risk, investment risk, the recovery of funds risk, income distribution causes of risk and financial risk analysis, and summarized some measures toprevent financial risks, to control financial risk, creating value for the enterprise.
Keyword: Financial risk; causes; preventive measures; control
