Quantitative risk analysis is done in 6 steps.

- Assign Asset Value (AV)
- Calculate Exposure Factor (EF)
- Calculate Single Loss Expectancy (SLE)
- Assess the annualised rate of occurrence (ARO)
- Derive the annualised loss expectancy (ALE)
- Perform cost/benefit analysis of countermeasures

**Exposure Factor** (**EF**) represents the percentage of loss when an asset is violated.It can also be called as loss potential. Expressed in percentage.

**Single Loss Expectancy (SLE) **is the monetary value of loss for a single realised risk against an asset. EF is needed to calculate SLE. Expressed in dollar value.

SLE = Asset Value(AV) * Exposure Factor (EF)

**Annualised Rate of Occurrence (ARO) **is the expected frequency of occurrence for a risk or threat within a year.

**Annualised Loss Expectancy (ALE) **is the possible yearly cost of all occurrences of a threat against a specific asset.

ALE = SLE * ARO