| dc.description.abstract | It has been generally assumed and concluded that the private
sector firms perform better than PEs in similar undertakings. This
has not been, however, substantially empirically proved in the
Kenyan setting. In theory, profits will be highest when an
enterprise- public or private-strives to maximize profits in the
competitive market under managers with the autonomy, capacity, and
motivation to respond to competition, and when enterprises that
cannot compete are liquidated In practice, public enterprise
seldom face such conditions.
There are several other factors that affect the performance of
a firm. Such factors seem to be more favourable ln the private
sector than in the public sector and that is why the former
outperforms the latter. This study compares the performance of
private firms with that of public enterprises using financial
ratios as the comparison criterion. Twenty-eight companies were
taken from each sector and eight ratios were computed for each of
the companies from the two sectors. Mean ratios for each company
were computed. Finally, mean ratios for each sector were computed
and then compared over an average of eight- year period.
From the research findings it was concluded that what has been
assumed all along is actually true- that, in financial terms,
private sector firms outperform -p-ublic enterprises .in similar
undertakings. Even though the public enterprises seemed to be
highly indebted than the private firms, it was not possible to
conclude that it is actually the case as the statistical test for
any significant difference showed that there is no difference | en |
