KEY FACTOR DIFFERENCES BETWEEN TOP-RATED AND LOWEST-RATED INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) COMPANIES ON THE U.S. STOCK EXCHANGE: A COMPARATIVE STUDY OF INVESTMENT GRADE AND NON-INVESTMENT GRADE FOR THE PERIOD 2021-2023

• Main Author: Ramadani, Annisa
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/83151
• Institution: Institut Teknologi Bandung

The technology industry has experienced rapid growth and transformation in recent years, driven by digital innovation and increasing reliance on technology across various sectors. This underscores the importance of the Information and Communication Technology (ICT) sector in driving economic growth and innovation, as well as its significant role in digitalization. While a qualitative approach can be an appropriate method for monitoring long-term growth and innovation of successful ICT companies, this approach is inadequate in identifying financial risks that could lead to failure, such as bankruptcy risks. Many institutions and researchers have conducted studies to measure the value created by digitalization, but few emphasize the importance of financial information as a tool to assess the performance of ICT companies. Therefore, this research aims to evaluate the performance of companies in the ICT sector listed on the US stock exchange, focusing on performance differences between companies that receive the highest credit ratings in the Investment Grade category and those that receive the lowest ratings in the Non-Investment Grade category. This research method uses discriminant function analysis to identify the best financial ratios that distinguish the performance of ICT companies based on their credit ratings. Data collection was conducted using purposive sampling from companies listed on the US stock exchange during the period 2021-2023. The research sample includes 50 US-based companies, with 25 companies in each of the Investment Grade and Non-Investment Grade groups. The results of the study show that there are significant differences in financial performance between companies with Investment Grade and Non-Investment Grade credit ratings. The most significant financial ratios in distinguishing company performance are CFO to Net Sales, Total Debt to Total Assets, and CFO to Current Liabilities. This discriminant function model has a prediction accuracy of 71.3% during the period 2021-2023.