Enron Financial Statement Analysis

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FINANCIAL STATEMENT ANALYSIS

SUBMITTED TO: MISS MADEEHA
SUBMITTED BY: ARSHIA SAQIB
MAJOR ACCOUNTING & FINANCE
SEMESTER: 7
DATED: 30-09-2015

COLLAPSE OF ENRON

INTRODUCTION
The rise and fall of the high profile businesses such as WorldCom, Parmlat, Tyco, and Enron has been a topic of many debates and researches among the investors, regulators, academics, and government in recent years. Enron was one of the biggest failure in the history of American mercantile capitalism therefore it had an impact on the financial markets because it caused a lot of loss to the insurance companies, banks and some pension funds that had been directly invested in Enron. Failure of this giant corporation made people think about the measures that could
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In the case of Enron, its corporate culture played a vital role in its downfall. Senior executives were of the view that Enron should be best at everything and shareholders were over optimistic about the operating conditions of the firm. When company started to face failure and losses, they tried to cover up and hide the losses instead of making an effort to do something to correct them. (Li, 2010)
 ETHICAL CLIMATE
Different corporations have different cultures. Culture of the organization should be considered. Besides this, certain factors should be considered such as norms of behavior, rewards of employees for succeeding or they are considered as the shepherds of firm’s reputation, factors causing misconduct and problems that cause management to make wrong decisions.
 COMMUNICATION WITH EMPLOYEES
Failing to communicate and interact with the employees causes more pain than smashing thumb with a hammer. Communication can be fatal. Informal meetings and communication of employees with managers discussing about their expectations and requirements often can be fruitful for a company. The goals, role, priorities, and expectations once discussed can help in the longer run. There is no doubt that more governance from the board would have saved Enron from such a collapse. (Li,
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