What Is A Risk Assessment Matrix?

What is a Risk Assessment Matrix? A risk assessment matrix is a matrix utilized during financial risk analysis to specify the extent of risk by calculating the probability or chance against the occurrence of outcome severity in terms of loss. This is an easy method to improve the visibility of financial risks and help manage decision-making in businesses. Financial risk is defined as the chance that an investor, customer, or company will suffer any direct or indirect loss resulting from an investment and include other factors that can affect investment such as credit risk, liquidity risk, and investment grade, and market risk. Risk assessing is a branch of mathematics that aims to assign a value to the different variables of a certain condition or situation and then evaluate the relation between the variables and the outcome.

The risk matrix can be presented to the stakeholders using many different types of presentations, including graphs, tables, and charts, depending on the needs of the presentation. The primary aim is to highlight the key areas and their associated probabilities of occurrence over a period of time.