Acta Scientiarum Polonorum
Silvarum Colendarum Ratio et Industria Lignaria

Risk management is a multi-stage process of coordinated actions aimed at adjusting the scale of risk to an acceptable level. One of the elements of this process is the risk quantification stage, which broadly allows the estimation of the probability of negative events occurring over a specified time horizon. In this publication, the authors reviewed the methods of measuring financial risk available in the literature, whose assumptions allow for implementation in the process of estimating financial risk in forest management, specifically in the measurement of financial risk in the financial management conducted by the State Forests National Forest Holding (hereinafter PGL LP). The study assumes that for three types of financial risk, namely market risk, liquidity risk, and trade credit risk, which the authors believe play a significant role in shaping the level of aggregated financial risk within PGL LP’s operations, three quantification methods will be selected for each of the indicated categories of financial risk. These methods will optimally reflect the level of each type of risk in PGL LP. Furthermore, when selecting the most appropriate methods, the conditions of financial management conducted by forest management entities were taken into account. Based on the assumptions made and the review of the literature, it was found that there are several methods that can have practical applications in the process of estimating financial risk in forest management. However, each of the presented solutions for estimating financial risk requires adjustment to the specificity of the forestry industry. It was also noted that for all entities conducting activities, goals regarding risk measurement should be formulated differently, which may significantly influence their preferences in selecting particular methods of measuring financial risk.