AAA – L3 – SA – Q1.6 – Business Risks

The following are all business risks. Which is the odd one out?

 High financial gearing

B   The rate of inflation

C   Overtrading

 A dominant chief executive

B

Explanation:
Inflation is an external business risk, as it arises from macroeconomic factors outside the company’s control. High financial gearing, overtrading, and a dominant chief executive are internal business risks, as they stem from the company’s financial structure, operations, or management. Thus, B is the odd one out and the correct answer.