Habib ARanasinghe DBhuiyan MBU2024-05-212024-05-212024-05-05Habib A, Ranasinghe D, Bhuiyan MBU. (2024). Sales Order Backlog and Credit Ratings. Accounting in Europe. Latest Articles. (pp. 1-27).1744-9480https://mro.massey.ac.nz/handle/10179/69628This study examines the association between sales order backlog and credit ratings. We posit that credit rating agencies consider order backlog as a positive signal about strong future demand and incorporate that into their rating decisions and provide higher ratings to firms with substantial order backlogs. However, being a non-GAAP, unaudited metric, order backlog could also reduce financial reporting quality and hence, credit ratings of firms. Using a sample of US firms from 1980 to 2017, we find a positive and significant association between order backlog and credit ratings, suggesting that order backlog serves as a valuable measure in credit rating assessment by providing positive signals about future earnings to rating agencies.(c) 2024 The Author/sCC BY-NC-ND 4.0https://creativecommons.org/licenses/by-nc-nd/4.0/order backlogcredit ratingsdiscretionary accrualsJournal article10.1080/17449480.2024.23458711744-9499journal-article1-27