The term "financial impact" refers to the effect that an event, decision, or change has on an individual’s or organization’s financial situation. This can include changes in revenue, expenses, profits, or overall financial health. For example, a new business strategy may lead to increased sales, while unexpected expenses can reduce profits. Understanding financial impact is crucial for making informed decisions. It helps individuals and organizations assess risks and benefits associated with various actions, such as investing in new technology or expanding into new markets. By analyzing potential financial outcomes, stakeholders can better plan for the future.