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Enterprise Risk Management to Minimizing Financial Distress Condition Using Analytical Hierarchy Process Method in PT. XYZ

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  • Ervie Nur Afifa Mukhlis
  • Sylviana Maya Damayanti

Abstract

PT. XYZ as one of telecommunications infrastructure providers that suffered losses gave a strong signal that the company was experiencing financial distress. Altman z-score is used to know the condition of the company. The result of Altman z-score analysis company has to further analyze the cause of financial distress. To prevent the company from bankruptcy risk, we cannot only focus on the financial aspect but also from various aspect. Enterprise risk management is used as a tool to identify what risks that could lead companies to experience financial distress and which risk should be mitigated. Risk assessment in this study using the analytic hierarchy process to check and reduce the expert inconsistency. After conducting risk management process, monitoring and review as the final step and implementation of this study. The result from this study is most of the risk are classified into high and medium risk can be mitigate by reduce or transfer the risk depend on the most suitable risk treatment. There are risks that classified as low risk, environment risk and promotion risk.

Suggested Citation

  • Ervie Nur Afifa Mukhlis & Sylviana Maya Damayanti, 2021. "Enterprise Risk Management to Minimizing Financial Distress Condition Using Analytical Hierarchy Process Method in PT. XYZ," European Journal of Business and Management Research, European Open Science, vol. 6(1), pages 76-86, January.
    • Handle: RePEc:epw:ejbmr0:v:6:y:2021:i:1:id:50668
    DOI: 10.24018/ejbmr.2021.6.1.668
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