We've covered three major categories of risk that influence valuation: risks due to company size, risks from the broader industry and market, and risks unique to a specific company's operations. Let's practice identifying which is which.

Engagement Message

Can you recall one example of a company-specific risk?

Type

Sort Into Boxes

Practice Question

Sort these risk factors into the correct category.

Labels

• First Box Label: Size Risk
• Second Box Label: Company-Specific Risk

First Box Items

• Under $5M revenue
• Limited resources
• Small market share

Second Box Items

• Key person dependency
• Customer concentration
• Single supplier

Type

Swipe Left or Right

Practice Question

Does the following factor point to an Industry/Market risk or a Company-Specific risk? Swipe to categorize each one.

Labels

• Left Label: Industry/Market Risk
• Right Label: Company-Specific Risk

Left Label Items

• A recession is depressing consumer spending.
• New technology is disrupting the entire sector.
• Interest rates are rising, making debt more expensive for all firms.

Right Label Items

• The company's founder and lead salesperson is retiring.
• 80% of revenue comes from a single client.
• The company's main factory is located in a flood zone.