3rd Asia Pacific International Conference on Industrial Engineering and Operations Management

Effect of Liquidity Ratio, Activity Ratio, CEO POWER and Economic freedom on Bond Rating (Empirical Study on Non-Financial Companies Rated by PT. Pemeringkat Efek Indonesia 2016-2020)

Pascalina Sindi Nareswari & KHAIRUNNISA KHAIRUNNISA
Publisher: IEOM Society International
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Track: Undergraduate Research Competition

Bond ratings are an indicator of the rating agency's assessment of the relative performance of contract-based debt issuers in meeting their contractual obligations. Bond ratings describe the prospects for the reliability and viability of the bonds purchased. The purpose of this research to analyze and examine the effect of Liquidity Ratio, Activity Ratio, CEO POWER and Economic freedom on Bond Rating (Empirical Study on Non-Financial Companies Rated by PT. Pemeringkat Efek Indonesia 2016-2020). Population in this study are Non-Financial company listed in the Indonesia Bond Market Directory and rated by PT PEFINDO in 2016 – 2020. The sampling technique used was purposive sampling and obtained 7 companies in Non-Financial company listed in the Indonesia Bond Market Directory and rated by PT PEFINDO with an observation period of five years so that 35 samples were obtained in this study. The data analysis method in this study is logistic regression analysis with SPSS 25. The findings of this study are partially activity ratio has a significant negative effect on bond rating, while liquidity ratio, CEO power and economic freedom does not affect on bond rating. However, simultaneously show that liquidity ratio, activity ratio, CEO power and economic freedom on bond rating have a significant effect on bond rating. The conclusion of this study provides some support and consideration for company management to increase the total amount of assets.

Published in: 3rd Asia Pacific International Conference on Industrial Engineering and Operations Management, Johor Bahru, Malaysia

Publisher: IEOM Society International
Date of Conference: September 13-15, 2022

ISBN: 978-1-7923-9162-0
ISSN/E-ISSN: 2169-8767