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Reporting & leadership
Financial risk management
Identifying what could hurt the business financially — customer concentration, FX, interest rates, a covenant, a key supplier — and deciding what to hedge, insure, diversify, or accept.
Owned by: VP / CFOTest band: VP / CFO
In practice
Concentration is the one small businesses under-rate: one customer at 30% of revenue is a risk to manage, not a receivable to wait on.
The kind of thing the test asks
- One customer is 35% of revenue. The first action is…
- Half of revenue is in euros; costs are in dollars. The euro falls 10%. The exposure was…