Given the rise in international trade and development in logistics, studying how firm-level networks introduce vulnerabilities is important for understanding a firm’s direct and indirect risk exposures in supply chains. The paper presents a new channel for operational and financial risk management. This project aims to identify different sources of risk affecting a firm’s financial policy and supply chain decisions. A firm’s capital structure and supply chain decisions may be intertwined because it establishes supply and customer relationships in order to produce. The absence of a unified framework to study both leverage and supply chain network formation has resulted in disjointed literature. In addition, studying either leverage or supply chain variables in isolation misses equilibrium pricing and quantity effects that propagate through the entire network.