The “Risk Factors” Section Of Dropbox’s Prospectus

Name Tutor Course Date Risks The dropbox's prospectus has mentioned various risks which can adversely affect its business and revenue in the section "Risk-factor". The risks which are mentioned can be explained under the following categories; 1 Competitive Risk: Competitive risk indicates that the competitive forces have a high possibility of preventing the organization from achieving their set objectives. The risk is mostly associated with the risks of declining business revenues and margins because of the competitor’s action. In this case, the prospectus explains the risk related to innovation and competitiveness. The lack of innovation and up-gradation may be harmful to company's operations. 2 Market risk: It is stated that the revenue is decreasing due to its market competition and slower demand. The initial and capital investments of the company is too high to be covered by the revenue in the short term which may result in net losses. 3 Exchange rate risk: It is written in the prospectus that the company is showing its financial statements in US Dollars. In the case of devaluation in exchange rate of US dollars will lower the company’s revenue and profits. 4 Legal risk: Legal risk entails the risk of reputation loss which mainly results due to the lack of awareness and how the law is applied to the business. The company is subject to many US and international laws. In case of any change in these laws may increase the cost of operations, settlement-cost and claims which may lower company's profits. The company is also liable to adhere many laws relate...