A firm's business risk is largely determined by the financial characteristics of its industry,especially by the amount of debt the average firm in the industry uses.

Business Risk

The possibility a company will have lower than anticipated profits or experience a loss rather than taking a profit.

Financial Characteristics

The key attributes and figures that define the financial health and performance of a business or investment.

Debt

Debt represents money borrowed and to be repaid, typically with interest, by individuals or entities such as corporations and governmental bodies.