THE RELATIONSHIP BETWEEN INTEREST RATES, FINANCIAL RATIOS, AND BOND RATINGS WITH PROFITABILITY AS A MEDIATING VARIABLES IN NON-FINANCIAL SECTOR COMPANIES IN INDONESIA
DOI:
https://doi.org/10.2478/eoik-2025-0005Keywords:
Bond rating · Interest rate · Leverage · Liquidity · ProfitabilityAbstract
During the latest decades, regional creativity has often been con-
sidThis study seeks to investigate the relationship between interest
rates, liquidity, and leverage to non-financial companies in Indonesia
who have issued bond securities between 2018 and 2023 with profit-
ability as an intervening variable. Panel data regression analysis and
path analysis are used in the study to explore the connections between
the variables, both directly and indirectly. According to the results,
bond ratings are heavily affected by interest rates, but liquidity does
not appear to play a major role. Moreover, leverage appears to have a
positive effect on bond ratings. Moreover, profitability is significantly
influenced by interest rates, while leverage has a detrimental effect
on profitability. The study suggests that there is a slight influence of
profitability on the connection between interest rates and bond ratings,
but not for liquidity or leverage. Interest rates are found to have a sig-
nificant positive effect on bond ratings, whereas liquidity and leverage
have minor direct impacts. These findings contribute to investors
in making bond investment decisions, as well as for companies in
optimizing their capital structure to improve bond ratings. This study
suggests further development by expanding the coverage of other in-
dustry sectors and adding variables such as corporate governance and
macroeconomic indicators to increase external and internal validity.
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Assoc. Prof. Dr. Masno Marjohan, S.E., M.M., M.M.
Lecturer of the Faculty of Economics and Business, Management Study Program and Master of Post-
graduate Management Pamulang University. Banten. Indonesian
Email: dosen00124@unpam.ac.id
Orcid: 0009-0002-2555-7078
Dr. Sri Retna's Sampurnaningsih, M.Sc.
Lecturer of the Faculty of Economics and Business, Management Study Program and Master of Post-
graduate Management Pamulang University. Banten. Indonesian.
Email: dosen1366@unpam.ac.id
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