The Fall of Enron Essay
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 ethics in an attempt to report ever increasing income and keep its stock prices high and how despite its short-lived surge of growth, it is still, even 11 years after a bankrupt, struggling to stand on its feet. The role of Enron’s top management and its auditors is elaborated upon, as is the …show more content…
Enron Corporation was originally set up in 1932 as Northern Natural Gas Company in Nebraska and it was only in the mid-1990s that the name was changed to Enron. The company was led by Kenneth Lay and during the late 1990s and 2000, it was considered to be America’s most innovative company. It was started as a natural gas producer and marketer and slowly diversified into several energy and energy related projects across more than 30 countries. It also started acting as a trader and service provider for energy related matters and expanded its business portfolio across multiple lines.
Enron’s business was divided into 3 main units – wholesale services that dealt with marketing of many commodities; energy service or retail of energy related services to commercial and industrial companies; and a global services unit that comprised of its pipelines business as well as wind and hydro energy projects across the globe and Enron Online, a global commodity e-commerce website.
Enron was also one of the loudest voices fighting the case for deregulation of energy during the California crisis. While market data was confidential, a 40% YOY