Privatization is the transferring of ownership from state to private ownership expecting that the lackluster and unsatisfactory performance of state-owned enterprises can be improved. This study was focuses on the evaluation of operating and financial performances of the privatized firms which issued shares in capital market. The research was carried out by investigating the performance of the firms after privatization, and evaluating the performance of initial public offerings (IPOs) on the short-run and the long-run. The performance were studied through statistical analysis of the dependency of several independent variables namely performance proxies i.e. soft budget constraint, fraction of share sold, share allocated to employee and top …show more content…
It also can be meant the transition from a public listed company (named Berhad/ “Bhd” in Malaysia) to a private company (Sendirian Berhad/ “Sdn Bhd”). However, the term ‘privatization’ in this study is meant the transition from a public listed company to a private company, same meaning with the terms ‘going private transaction’, ‘public-to-private transaction’, ‘buy-out’, or ‘takeover’ that found in other studies. Its meaning includes the alteration in the ownership structure of a public listed company, and the removal of a company’s official list from the stock exchange of Malaysia (Bursa Malaysia). Privatization transactions are a special form of a buy-out. There are several types of buy-outs, the most common are management buyout, management buy-in, and leveraged …show more content…
The results showed that the performance proxies ROS, ROA and ROE deteriorated and real sales and net profit of the firms improved upon privatization. The factors that are responsible to the performance changes differ depending on the performance proxies. The factors responsible for ROS are the short-term debt to total asset and the share allocated to employee, the fraction of share sold and the share allocated to employee are responsible for ROA, while the ROE is affected by the top management team change only. The real sale is influenced by the fraction of share sold and the share allocated to employee, while net profit is not affected by any factor considered in this study. Financial performance can be described as the measurement of the results of a firm’s policies and operations in monetary terms. This term is also used as a general measure of a firm’s overall financial health over a given period of time, and can be used to compare similar firms across the same industry or to compare industries or sectors in
Municipal control or an alternative delivery method? This is the question that has intrigued all levels of local government and created intense debates between taxpayers across municipalities. The services that municipalities provide are often vital to the existence of a local area. The issues of accountability, cost savings, quality of service and democracy often arise when choosing the best options to deliver services to a municipal area. In recent years the concepts of privatization, alternative service delivery and public-private partnerships are often promoted as ways cut down on overburdened annual city budgets and promote a higher quality of service to citizens. Municipalities have historically always provided basic services such as fire protection, water purification/treatment and recreational facilities. However, would private companies or another municipality be able to better deliver the same services more efficiently or at a lower cost? The city or town often provides a political grass roots approach to most local problems. Municipalities are better positioned and have a wider scope to provide services to their constituents in order to ensure quality of service that does not erode accountability and transparency, or drive the municipality deeper into debt.
The first financial ratio of the analysis is the Price to Earnings ratio (“P/E ratio”). The ratio is computed by dividing the price of one share of common stock, by the earnings per share of common stock. This analysis uses diluted earnings per share which assumes the issuance of new stock for all existing stock options. Also, the price of the stock was computed as an average of the fourth quarter high and low stock prices published in the 10K report of each company, because the year end stock prices were not listed for all the companies. Because the P/E ratio measures the relative costliness of different stocks, in relation to their income, it provides a useful place to begin the analysis.
Eckbo and Masulis (1992) open their paper by explaining the decline in rights issues and the surge in firm commitments. To show this Eckbo and Masulis use a sample of 1,249 equity offers between 1963-1981.
Gaughan, P. A., 2002. Mergers, Acquisitions, and Corporate restructuring. 3rd ed.New York: John Wiley & Sons, Inc.
The privatization and fragmentation of space in post-industrial urban America is a widespread social problem. As society becomes even more globalized as a result of technological advances, the rampant spread of a privatized public realm is ever-increasing. Public space is needed as a center in which to bring people together to share a common place. It is within public spaces that public life unfolds and without public spaces such as parks, streets, and buildings, the mixing of classes will become increasingly uncommon. Society is made up of two sectors: the private and public, and it is essential that both remain separate entities. However, through the use of fear tactics especially the threat of violent crimes, privatized settings are spreading throughout the public sphere. In this analysis, it is my intent to explore the various tactics being used to impede upon the public sphere. In doing so, I will explore the causal factors that contribute to the increased privatization of urban public life.
Water has become a very controversial issue in the United States and around the world. As populations increase and resources decrease, the way we use our resources and keep populations safe become more and more important. Throughout the world there are nearly 1.1 billion people who do not have access the clean drinking water. 5 Most of these 1.1 billion people are located in poor areas and do not have the financial means to build the infrastructures needed to provide water to the citizens of their country. 5 Drinking water is an essential part of our everyday life. People must have water to survive, but it must be clean and safe to consume.
In Taft, California, with a perimeter of razor wire, armed prison guards, supervise hundreds of medium security level federal inmates. Welcome to one of America's newest and fastest growing trends in the area of corrections. This new phenomenon is termed, The Corporation of Modern Corrections. Faced with an increase in prison overcrowding and aging institutions, court orders demanding immediate reform coupled with a straining budget, mandatory minimum sentences, and the public's attitude toward "getting tough on crime", America's justice system is in need of an overhaul. Thus, government leaders are ready to consider different options to help reduce the strain, while still meeting is legal responsibility to provide services. The option to emerge to the forefront is Prison Privatization - " the transfer of asset's and of production of public goods and services from government to the private sector."1 in other words, private interest is being given the opportunity to help alleviate the strain of taking care of a growing population more economically and efficiently than the government.
Woodrow Wilson, after earning his Ph.D. became a political science teacher at a college in Pennsylvania. At that time, public administration was very foreign in America and Wilson felt the need for it to be developed. Woodrow Wilson framed the initial study of public administration in The United States. Additionally, according to Wilson there were many events that took place during that era of the late nineteenth century that forced America to take notice of its need for public administration. “Technological innovations and growing international involvement in the Spanish-American War, combined with increasing participation in a democratic government,”
Contracting out is the process through which public organizations contract with private sector organizations to provide services normally provided by public agencies. It is a form of privatization, which is defined as any shift of activity or functions from the state to the private sector, more specifically, the shift of production of goods or services from public to private. (Starr, 5) Privatization reduces the role of government and increases the role of private sector agencies. However, public agencies maintain ultimate control over the provision of services and they control government funding.
Five executives of highly successful companies discuss why they have made the decision to stay privately owned. Dick Forsythe of Eggers Industries Inc. says, “We stay private to maintain control.” Once a company goes public, they have to report all inside information including quarterly earnings and business strategies. It is clear that a privately held company has less pressure to increase earnings each quarter, which leads to a less stressful working environment which proves to be more effective. A major reason to stay private is that those who have contributed to the company’s success have a great pride in ownership. This is popular in family owned businesses, people want the business to remain in the family for future generations. Once a firm goes public, they often have to follow strict guidelines regarding business operations that restrict creativity. Companies looking to breach out into new economic sectors are better off remaining privately owned because of the flexibility it offers. Ridge Braunschweig, executive VP and CFO of Orion Corporation states, “A good, solid, consistent rate of growth over time is more important than short-term quarterly earnings results.” For private companies it is proven that long term-grown is better than short term growth. A major downfall when a corporation goes public is that the company’s culture changes. Employees of
Privatisation means transferring the control of an enterprise from the government sector to the private sector. Generally, but not always, this also means transferring ownership of the Public sector enterprise as well as control.
Organizations use financial statements and ratio analysis assess financial performance viability. The ratio analysis are used to identify trends and to perform organizational comparison (financial) with other companies within same industry. Ratio analysis, using data reported on the financial statements, are divided into five major categories: common size, liquidity, solvency, efficiency, and profitability. This paper will assess the financial stability of John Hopkins Hospital (JHH) using the five ratio analysis.
Loos, N. (2006). Value creation in leveraged buyouts: Analysis of factors driving private equity investment performance. Wiesbaden: Deutscher Universitäts Verlag.
Securities Commision Malaysia. (2014). General Article: Corporate Governance. Retrieved March 26, 2014, from Securities Commision Malaysia: http://www.sc.com.my/corporate-governance/
In the past, the company performance was measured by asking ‘how much money the company makes?’ To a certain extent, they are right because gross revenue, profitability, return on capital, etc. are the results that companies must bring to survive. Unfortunately, in today business if the management focuses only on the financial health of the company, numerous unwanted consequences may arise.