1. What Is Risk Matrix Calculation?

Risk matrix calculation is a systematic approach to evaluate and prioritize risks by assessing their likelihood and potential impact. It helps organizations make informed decisions about risk management and resource allocation.

2. How Does The Calculator Work?

The calculator uses the fundamental risk calculation formula:

Where:

• Likelihood — Probability of risk occurrence (scale 1-5)
• Impact Score — Severity of consequences (scale 1-5)
• Risk — Calculated risk score (1-25)

Explanation: The risk matrix combines probability and impact to create a comprehensive risk profile, allowing for better prioritization and management.

3. Importance Of Risk Assessment

Details: Proper risk assessment enables organizations to identify potential threats, allocate resources effectively, implement preventive measures, and develop contingency plans to minimize negative impacts.

4. Using The Calculator

Tips: Select likelihood on a scale of 1 (Very Low) to 5 (Very High) and impact score on a scale of 1 (Negligible) to 5 (Severe). The calculator will compute the risk score and provide the corresponding risk level.

5. Frequently Asked Questions (FAQ)

Q1: What do the likelihood scale numbers represent?
A: 1=Very Low (Rare), 2=Low (Unlikely), 3=Moderate (Possible), 4=High (Likely), 5=Very High (Almost Certain)

Q2: How is impact score determined?
A: 1=Negligible (Minimal effect), 2=Low (Minor disruption), 3=Moderate (Significant impact), 4=High (Major consequences), 5=Severe (Catastrophic effects)

Q3: What do the risk score ranges mean?
A: 1-5=Low Risk, 6-10=Medium Risk, 11-15=High Risk, 16-25=Very High Risk

Q4: When should risk assessment be performed?
A: During project planning, when introducing new processes, after significant changes, or as part of regular organizational reviews.

Q5: Are there limitations to this approach?
A: While useful, this method may oversimplify complex risks and should be complemented with qualitative analysis and expert judgment.