This website uses cookies to ensure you have the best experience. Learn more

Enron Essay

1076 words - 5 pages

What is Enron?

Until its decline into bankruptcy in 2001, Enron was the United States’ seventh-largest corporation. Enron grew from a natural gas pipeline company into a trading and marketing giant, moving first into the business of acting as a broker between energy suppliers and buyers, then expanding its role as a broker of non-energy transactions, and later adding a variety of diverse investments to its portfolio. Enron was a leading advocate of restructuring energy markets in the United States and the largest player in the energy trading business.

What led to Enron’s collapse?

The company’s most recent troubles can be traced to revelations in October 2001 of massive amounts ...view middle of the document...

Financial analysts, economists and regulators agree that Enron’s fall was the result of investors and financiers pulling back after they lost confidence in the company’s financial disclosures and debt levels –- not because of problems in competitive energy markets.

U.S. Secretary of Energy Spencer Abraham is among those making this point. “In the face of Enron’s collapse, the largest bankruptcy in U.S. history, there were no price spikes, no trading panics, no electricity outages and no gas shortages,” Abraham said. “… there is no indication that the energy side of Enron’s business was the cause of its collapse.”

Were electricity consumers harmed by Enron’s collapse?

No. In the days and weeks following Enron’s fall, there were no price spikes in electricity markets and the power continued to flow. Although Enron had been a dominant player in the energy trading business, competition has evolved to support a large number of vibrant companies. These companies quickly and effectively picked up the slack created by Enron’s sudden departure. In the days and weeks following Enron’s bankruptcy, power supplies remained constant, trading and marketing continued without disruption and prices remained stable.

How did energy markets respond to Enron’s bankruptcy?

Energy marketing and trading continued without interruption in Enron’s wake. Ironically, the competition that Enron helped establish ensured that the company’s departure did not become a crisis in terms of energy supply – as trades were picked up by other companies, energy supplies were undisturbed, power flowed from generators to utilities to consumers, and prices remained stable.

Did Enron’s bankruptcy harm the electricity industry?

On Wall Street, the Enron collapse was cited by some analysts as being responsible for a substantial decline in stock prices for a number of electricity marketers, traders and suppliers.

Some credit agencies – criticized by some as slow to act as the Enron saga unfolded – adopted a tougher stance with regard to energy firms’ balance sheets. Responding to new expectations and temporary downgrades from credit agencies, a number of energy companies adjusted their holdings to enhance their cash positions and lower their debt/equity ratios. This, along with adequate reserve capacity currently in many regions of the country, has resulted in the suspension of some announced generation projects under development and projected to come on line in the middle of the decade.

Does Enron’s fall mean the end of energy...

Other assignments on Enron

The Enron And Worldcom Scandals Essay

369 words - 2 pages The Enron and WorldCom Scandals Case: Enron 1. Which segment of its operations got Enron into difficulties? The segment of its operations that got Enron into trouble was Kopper and Dodson creating a series of limited partnerships and limited companies through which to operate their interests, but Kopper had no outside investor at risk. 3. Did Enron’s directors understand how profits were being made in this segment? Why or why not? I do not

Enron’S Stakeholder Impact Case Analysis

1727 words - 7 pages Introduction: Widely known as the champion of the energy industry, Enron is suddenly faced with a corporate crisis in the form of a scandal. This scandal involves not only Enron’s accounting practices but also its corporate governance and culture (Lawrence & Weber, 2008). This report will recommend some potential strategies for Enron to move forward from the scandal. To do this, we must incorporate stakeholder theory, which “argues that

Term Papaer

3314 words - 14 pages Final Paper I have selected the non-fiction book named ‘The Smartest Guys in the Room’ written by Bethany McLean and Peter Elkind. The book is based on the The Amazing rise and Scandalous fall of the Enron Corporation. Enron Corporation was an American energy, commodities and service company based in Houston, Texas. Before its bankruptcy in December 2, 2001, Enron employed more than 20,000 employees and was one of world’s major electricity

Arthur Andersen

4672 words - 19 pages , | | | | | |2002 | | | | |Enron |Inflation of income, assets, etc.,|$66.4 billion | 6,100 |$5 million (for | | |bankrupt Dec. 2, 2001 | | |shredding

Responsibility Web Site

933 words - 4 pages include the consumers, communities, employees, and its shareholders. An example of this situation would be Enron, who in 2006 were in a scheme whereas they had constructed several off-the-books partnerships. These partnerships were used to hide the massive debts of Enron, which in turn artificially inflated there stock prices (Trevino and Nelson, 2006). This was a shameless attempt to keep current stockholders happy and attract new shareholders

Power And Politics

935 words - 4 pages . Legitimate power, this kind of power is the authority normally vested in a manager to control the behavior of the employees, based on the values, beliefs and structures of the organization. These three forms of power briefly discussed above played out itself in the case of Enron. Where Enron could have exerted influence or control for the overall interest of the organization, they started pursing personal interest by diverting into

Ethics In Business

819 words - 4 pages clients’ authentication and approval. In both scenarios however, there is a general legal duty to observe ethical standards in carrying out the work. Why did Enron fail? Enron was one of the Multinational corporations that failed in the recent decades. The major cause of Enron’s failure was the lack of auditing ethical standards and most specifically, failure of internal and external auditors to disclose financial flaws in the company, an

Anotated Bib

395 words - 2 pages into play in the accounting industry. Saying New: The author is saying that ethics need to be of a higher priority in accounting. He gives the example of the Enron and how they did not act ethically by stealing all of that money. Draw On Previous Research From: He cites other sources in his work but he does not have a list of his works cited at the end so I am not sure where he got his previous work from. Previous Research Covers: The

Comm 315 Week 3 Individual Assignment Personal Action Plan

323 words - 2 pages This archive file of LDR 531 Week 2 Managerial Organization New Ver contains: Enron Business Failure Option 1: Examining a Business Failure Research a business failure that occurred at a large organization such as Tyco International Ltd., Chrysler LLC, Daewoo Motor America, WorldCom, or Enron. Write a paper of no more than 1,050 words, describing how specific organizational-behavior theories could have predicted or

Jinsu

286 words - 2 pages pitfalls in practice: A case study analysis of the use of fair valuation at Enron. In Accounting Forum (Vol. 32, No. 3, pp. 240-259). Elsevier. Gore, P., Taib, F. M., & Taylor, P. A. (2000). Accounting for goodwill: an examination of factors influencing management preferences. Accounting and Business Research, 30(3), 213-225.  Goodacre, A., & McGrath, J. (1997). AN EXPERIMENTAL STUDY OF ANALYSTS' REACTIONS TO CORPORATE R&D EXPENDITURE

Business Ethics

2524 words - 11 pages involved. On top of jail time, unethical decisions in business can lead to fines for specific people and also firings of people involved. These are some serious consequences for employees of any business. One example of consequences that can come from unethical business decisions is the Enron case. Top-level executives of Enron were convicted of stealing money from the business and forging accounting records. This decision made by these employees led to

Similar Documents

Enron Essay

453 words - 2 pages John Newsome 01-30-12 Enron Video Assessment The video shown in class Friday, the 27th of January, told of the scandal of a company named Enron that basically committed accounting fraud for over six years. This brazen crime placed the company at the top of fortune five hundered companies as America's most innovative company by claiming huge annual revenues averaging in excess of one hundered billion dollars. Since the company went

Enron The Fallen Essay

1052 words - 5 pages Enron the Fallen Tiffany Califf Professor: Karina Arzumanova LEG100014VA016-1116-001Business Law I July 24, 2011 Describe how Enron could have been structured differently to avoid such activities. Enron’s leaders had the work ethic of only fighting for themselves and if others got hurt it was no big deal hurting. Enron had that it’s a dog-eat-dog thinking. This type of thinking would, in the end, be the demise of Enron. Enron focused

Enron Ethics Issues Essay

1839 words - 8 pages The activities of the leadership of Enron and its Board of Directors is a virtual how to on how unethical decisions can and will eventually bring a company to the brink of collapse. The short term rewards of unethical activity can be quickly overcome by the destructive force of investigations and market swings. How greed and lack of oversight can cause the disruption of the livelihoods of employees not directly involved with the unethical

The Fall Of Enron Essay

4627 words - 19 pages The Fall of Enron Abstract This research paper talks about the Enron case – how it rose to the level of one of the top companies in the world and then fell from grace so that it eventually had to file for bankruptcy. The paper will discuss the financial and accounting manipulations that Enron resorted to and the analysts approach towards its stock prices and will discuss its eventual fate. The study will revolve around how Enron shed its