Presented By

Sweta
MBA 3rd Sem
Roll No. -20134706019
 Definition of Risk Analysis
• Risk Analysis is the process that a company
goes through to assess internal and external
factors that may affect the business
productivity, profitability and operations.
• Risk analysis seeks to identify, measure, and
mitigate various risk exposures or hazards
facing a business, investment, or project.
 Process of Risk Analysis
• Risk Assessment Survey: This is the first step in the risk
analysis process. This step involves obtaining sufficient
information from the management of the entity for whom
the analysis is being done. 
• Identification of Probable Risk: The above step provides
inputs for the second step. The survey helps the risk
manager to identify various events due to which risk can
occur.
• Analyse the risk: This step should provide inputs
regarding the possible implications of risk occurrence &
the impact on the objectives of the entity. 
 Process of Risk Analysis
• Risk Mitigation Plan: This is part & parcel of the
above step. Here, a formal plan is formulated to
mitigate the risk to the extent possible. 
• Implement the plan: After the preparation of the risk
mitigation plan, it is critically analysed whether the
plan will be effective for the said purpose.
• Monitor Risks: The job is not done just at the
implementation stage. Regular scrutiny is made to
ensure that the plan is working well within the set
parameters.
 Type of Risk Analysis
• Quantitative Risk Analysis
Under quantitative risk analysis, a risk model is built using
simulation or deterministic statistics to assign numerical values
to risk. Inputs that are mostly assumptions and random
variables are fed into a risk model.
• Qualitative Risk Analysis
Qualitative risk analysis is an analytical method that does not
identify and evaluate risks with numerical and quantitative
ratings. Qualitative analysis involves a written definition of the
uncertainties, an evaluation of the extent of the impact, and
countermeasure plans in the case of a negative event occurring.
 Technique of Risk Analysis
• SWIFT Analysis: SWIFT means Structured What If
Technique. Here all “ifs and buts” of an event are identified
& analysed for solutions.
• Delphi Technique: It is a method of forecasting framework
wherein multiple rounds of questionnaires are sent to a
group of experts & results from such outcome are analysed
separately.
• Decision Tree Analysis: It provides a solution for different
pathways of situations that may occur after each event.
Each decision has an outcome. The decision tree analyses
the outcome separately.
 Benefits of Risk Analysis
• Early identification of risks is possible.
• Early mitigation of those risk is possible with a better
mitigation program.
• It provides pro-active disclosure of the situation to the
owners of the entity.
• It also identifies the gaps in the existing control
mechanism.
• It provides an analysis of the overall impact of those
assessed risks on the organisation as a whole & its
business.
 Disadvantages of Risk Analysis
• Risk analysis only discloses the situation but does not
measure the financial impact of such risk.
• Data is open for manipulations. The first step of risk
analysis is a risk assessment survey, wherein the risk
manager depends on inputs from the entity itself.
• Incorrect inputs result in incorrect evaluation, which
results in incorrect analysis & inefficient risk mitigation
measures. This derails the basic objective of risk analysis.
• The analysis is subjective for each person & some sort of
professional judgement is involved.
Thank You