The Impact of Financial Indicators on Sukuk Ratings: An Empirical Study of Indonesian Issuers (2018–2022)
Abstract
This study examines how leverage, liquidity, and profitability influence the sukuk ratings of Indonesian corporate issuers over the 2018–2022 period. Adopting a quantitative correlational approach, the research analyzes data from 25 firms issuing sukuk and listed on the Indonesia Stock Exchange, with rating information obtained from PEFINDO. Given the ordinal nature of sukuk ratings, the analysis employs an ordinal logistic regression model. The findings reveal that profitability has a significant positive effect on sukuk ratings, suggesting that firms with stronger profit performance are more likely to receive higher ratings. In contrast, leverage and liquidity are found to have no significant impact. These results are consistent with signaling theory, which posits that profitability serves as a key indicator of financial strength and credibility in the assessment of sukuk. Overall, the study contributes to the Islamic finance literature by highlighting profitability as the dominant determinant of sukuk ratings. It also offers practical implications for issuers, investors, and regulators, particularly in strengthening financial transparency and enhancing confidence in the sukuk market.
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