THE IMPACT OF GOING PUBLIC ON THE FINANCIAL PERFORMANCE OF PETROCHEMICAL INDUSTRY IN SAUDI ARABIA

Abstract

Going public could have a positive impact on the performance of firms. After the Initial public offering (IPO) process, a company can improve its financial performance and enhance its production. Therefore, this work has examined the effect of IPO on the financial performance of petrochemical companies in the Kingdom of Saudi Arabia. In this work, four companies (3 public and 1 private) from the petrochemical industry were used as sample. The public companies are Petro Rabigh, YANSAB, and SABIC and the private company is SATORP. For this work, financial statements of these companies were used as the data. The financial data were analyzed from the year 2006 to 2018. In addition, financial ratios were used to evaluate the financial performance of a collection of public and private companies. The findings of this work have shown that the public companies (SABIC, YANSAB, and Petro Rabigh) have demonstrated better financial performance compared to the private company SATORP, despite the economic recession. The financial performance of public companies has shown a better performance than that of a private company. This represents the positive impact that the public will have on the financial performance of the company.

CCS Concepts

• Information systems➝Database management system engines   • Computing methodologies➝Massively parallel and high-performance simulations.