An evaluation of financial and operating performance of privatized firms in Ethiopia

Although privatization has turned in to world phenomena, it is only recently that Ethiopia has launched privatization programs. This study compares the financial and operating performance of Tikur Abay Shoe Share Company (TASSCo) before and after privatization and it investigates some of the major factors that affect the company financial and operating performance. The data used in this study was obtained from the audited financial statement of the company. Ten financial performance indicators are calculated as average of three years before and three years after privatization. Furthermore T-test statistics is employed to examine mean differences of each variable before and after privatization. Contrary to the prediction of the researcher; the study documented decline in profitability, net income efficiency, capital investment, liquidity and insignificant increment in sales efficiency, leverage and number of employment following privatization.