Financial risk management refers to the process of identifying, analyzing, and mitigating potential risks that could negatively impact an organization’s financial stability and objectives. It involves the assessment of various financial risks, such as market fluctuations, credit defaults, liquidity shortages, and operational failures, among others. By implementing strategies, such as diversification, hedging, insurance, and contingency planning, financial risk management aims to protect assets, optimize returns, and ensure the long-term viability of a business or investment portfolio.