16. At its most basic, a risk analysis could consist of an estimate of the cost of each risk occurring, multiplied by a single probability of that risk occurring in a particular year.
17. For example, the risk of cost overruns of a particular service may be estimated as:
| Annual cost of service | £2m |
| Estimated impact of risk of cost overrun | £200,000 |
| Estimated probability of risk occurring | 10% |
| Estimated value of risk = £200,000 x 10% | = £20,000 |