Enron Case Analysis

mbekho72yahoo.com Management Finance Enron case analysis 1. Which parts of the corporate political science remains, internal and external, do you believe failed Enron the most? Answer: I believe that both internal & external corporate judicature system have shargons of failing Enron but the internal has to a greater extent impact on the failure of this comp both as following. These are the internal corporate governance system problems of planning, capital expression & capital anxiety. 1-Enrons management provides nontransparent financial statements did not clearly trace its operations and finances with shareholders and analysts, In addition, its complex business imitate and unethical practices required that the company use accounting limitations to counterfeit earnings and modify the balance sheet to portray a favorable depiction of its performance ignoring the liabilities . 2-way of calculating the earning & the profit really strange agent model for reporting revenue (where barely the trading or brokerage fee would be inform as revenue), Enron instead elected to report the entire place of each of its trades as revenue. So this reveals (Between 1996 to 2000, Enrons revenues increased by more than 750%, rising from $13.3 billion in 1996 to $100.8 billion in 2000.

This protracted expansion of 65% per year was unprecedented in any industry, including the energy industry which typically considered growth of 2-3% per year to be respectable. 3-Enron management obsessed with a focus only on short-run earnings to maximize bonuses. 4- Management culture pursue profligate spending especially among the executives. Employees had large expense accounts and many executives were give sometimes twice as much as competitors. 5- Enron executives formal long-term fixed commitments which are not matching with the mutation of future energy prices. The external corporate governance system problems: 1-Financial audit role: Enron executives... If you want to get a complete essay, order it on our website: Orderessay

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