Financial Risk Management involves identifying, assessing, and prioritizing financial risks to minimize their impact on an organization. This process includes analyzing potential risks such as market fluctuations, credit defaults, and operational failures. By understanding these risks, companies can develop strategies to mitigate them, ensuring stability and sustainability. Tools and techniques used in Financial Risk Management include hedging, diversification, and insurance. Organizations often employ risk assessment models to quantify potential losses and make informed decisions. Effective risk management helps businesses protect their assets and maintain profitability in an ever-changing financial landscape.