Enron was an energy trading company that grew tremendously in the 1990s to become the 7th largest company in America by 2001 with assets of $65.5 billion. However, in late 2001 it filed for bankruptcy. A journalist had questioned Enron's accounting in early 2001 based on signs like increasing debt, declining cash flows and poor returns. An analysis of Enron's 2000 annual report also revealed worrying financial indicators such as low profit margins, returns and high gearing that suggested problems but were overlooked.
“The Lesson from Enron Case - Moral and Managerial Responsibilities”AMU
The document summarizes the Enron scandal and bankruptcy. It discusses how Enron officials abused their power and privileges, putting their own interests above employees and shareholders. This led to Enron's bankruptcy in 2001. The document outlines Enron's history, growth through acquisitions, and use of off-balance sheet entities to hide debts and losses. Investigations revealed accounting fraud and deception by executives. Loophole abuse and risky investments eventually caused Enron's collapse when losses could no longer be concealed, making it one of the largest corporate frauds in history.