Comparison of financial and operating performance of privatized firms in Ethiopia

This paper assesses and compares the financial and operating performance of privatized firms in Ethiopia. Specifically, study compared, with the use of accounting data, pre-and post-performance of some selected fully privatized firms, using six (three before and three after privatization) years’ data. The study follows the standard methodology of comparison including profitability, operating efficiency, liquidity, leverage, capital expenditure and employment. It alsoused a before-and after research design for sample size of thirteen privatized firms, selected using purposive sampling. Data for the study were collected primarily from secondary sources and interview and analyzed through ratio analysis tools. Wilcoxon Z test and the Wilcoxon sign rank test were used as principal methods of testing for significant changes in the variables. The study was found in significant decline in profitability, employment and operating efficiency except sale efficiency and insignificant increment in liquidity, leverage and capital expenditure as well.