Effect of Debt-to-Asset Ratio, Maturity, Guarantees, and Company Size on Bond Ratings in Construction Companies

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Published Nov 30, 2023
DOI https://doi.org/10.29138/ijebd.v6i6.2578

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Titin Ruliana
Accounting Department, University of 17 Agustus 1945 Samarinda
Ratna Dewi Yanti
Management Department, University of 17 Agustus 1945 Samarinda
Abdurrahman Ahda Naufan
Management Department, University of 17 Agustus 1945 Samarinda
Jumadi Tukmuly
Management Department, University of 17 Agustus 1945 Samarinda

Abstract

The purpose of this study was to determine and analyze effect of the debt-to-assets ratio, maturity,
guarantee, and company size on construction company bond ratings. The population and sample of this
research is construction companies that publish complete financial reports from 2014 to 2022. Data
analysis uses logistic regression analysis. The results showed that: 1) Debt to assets ratio has no
significant effect on the probability of bond ratings, because investors tend to buy bonds because they see
the company's reputation not from the Debt to Assets Ratio obtained by the company; 2) Maturity has no
significant effect on bond ratings, because investors tend to buy bonds with ages under 3 years, because
companies with maturity under 3 years are able to pay off their obligations to pay the loan principal at
maturity; 3) Guarantees have no significant effect on bond ratings, because investors tend to buy bonds
because they look at the company's reputation, not from what is guaranteed and not guaranteed to the
company; 4) Company size has no significant effect on bond ratings, because investors tend to buy bonds
not in terms of company size but from the company's reputation; 5) The debt-to assets ratio, maturity,
guarantee, and company size affect bond ratings.

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Article Details

Issue
Vol 6 No 6 (2023): November 2023
Section
Articles
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This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

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