LEVERAGING Z-SCORE AND FINANCIAL RATIO AS EARLY WARNING SYSTEM TO MITIGATE SUPPLY CHAIN DISRUPTION AT PT GUNUNG RAJA PAKSI TBK

• Main Author: Sagita Maharani, Nazla
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/85938
• Institution: Institut Teknologi Bandung

PT Gunung Raja Paksi, a leading steel manufacturer, faces substantial challenges in sustaining profitability, which significantly affects its overall financial health and operational stability. These challenges are primarily driven by several key risk factors, including the volatility of raw material prices, intense competition within the steel industry, and broader economic downturns. The fluctuations in raw material prices directly impact the company's production costs and profit margins. When the costs of steel raw materials rise, it can compress profit margins unless these increased costs can be effectively passed on to customers. However, achieving this in a highly competitive market where price sensitivity is high poses a significant challenge. Moreover, the steel industry's competitive landscape necessitates a delicate balance between offering competitive pricing and maintaining high-quality standards. This constant pressure can lead to potential price wars, which further erode profit margins and put additional strain on the company’s financial performance. Another critical factor contributing to profitability issues is the economic downturns that periodically affect demand for steel products. During times of economic slowdowns, industries heavily reliant on steel, such as construction and automotive, tend to reduce their production activities, resulting in decreased demand for steel. This drop in demand translates into lower sales volumes and reduced revenues, compounding the financial strain on PT Gunung Raja Paksi.To address these challenges, this study is structured around four main components: risk assessment, Z-score model analysis, financial ratio analysis, and risk prevention formulation. The risk assessment process involves a comprehensive evaluation of both internal and external factors that could impact the company’s operations. This assessment identifies major risks, including disruptions in the supply chain, difficulties in obtaining financing, adverse weather conditions, major accidents, and fluctuations in the steel market. Each of these risks presents unique challenges that could affect the company's ability to maintain profitability and operational efficiency.