Mgmt 5590 Final

Use the lecture folder to help you complete this guide. The more detail you can provide the better prepared for the test you will be.

Enron had the largest bankruptcy in America’s history and it happened in less than a year because of scandals and manipulation Enron displayed with California’s energy supply. A few years ago, Enron was the world’s 7th largest corporation, valued at 70 billion dollars. At that time, Enron’s business model was full of energy and power. Ken Lay and Jeff Skilling had raised Enron to stand on a culture of greed, lies, and fraud, coupled with an unregulated accounting system, which caused Enron to go down. Lies were being told by top management to the government, its employees and investors. There was a rise in Enron 's share price because of pyramid scheme; their strategy consisted of claiming so much money to easily get away with their tricky ways. They deceived their investors so they could keep investing their money in the company.

Answer the questions. When you are finished, submit this test to your teacher by the due date for full credit.

Review the sample syllabus and sample rubric under the questions below. Then, provide answers underneath the following questions:

This now bankrupt company, misappropriated investments, pension funds, stock options and saving plans after deregulation and little oversight by the federal government. However, with deregulation an increasing competitive culture emerged as the CEO Jeffry Skilling motto to his organization was to “do it right, do it now, and do it better” this was the rally cried that pushed ambitious employees to engage in unethical behavior as Enron use deceptive “accounting methods to maintain its investment grade status” (Sims, & Brinkmann, 2003, pp.244-245). As Enron continued to flourish and received accolades from the business community this recognition drove executives to continue the façade of bending ethical guidelines before their public fall from

All questions on the examination will come from the lectures (Topics I – X) and the assigned chapters and parts of chapters in the textbook. To help frame the questions for you, they will be organized under the same main headings and subheadings used in the Lecture Notes. The only exceptions will be a few subheadings that pertain to material covered only in the text. Under each heading will be a mix of true-false and multiple-choice questions, and possibly a few analogies, with all answers to be recorded on a scantron sheet. Along with

The following are study questions for the examination. The examination will be a closed-book examination.

Jumping right into the summary then. Enron was one of the most successful corporations in America during its prime. Marketing electricity and other commodities, as well as, providing financial and risk management services to other companies were the main types of business that Enron conducted. However, Enron’s successful appearance was found out to be a façade, when it came out that the corporation was making a plethora of unethical business moves. Once the corporation’s actions became public, Enron’s fall from grace quickly followed. (Johnson, 2003)

The exam is an individual effort and should not be discussed with others. Send your completed exam to your assignment folder by the last day of class. The purpose of the exam is to demonstrate your understanding of both written and discussion materials presented in this course. If you have any questions concerning this exam, please send me an e-mail. I will remove your name and post the question and response in the main news group.

Refer to the questions in the following Sample Examination to represent the type of questions that students will be asked in the Final Examination. Refer students to the weekly readings and content outlines for each week as study references for the Final Examination.

Enron was one of the largest corporations in the United States. Enron was reporting revenues of over $100 billion, and its stock was being sold for $80 a share (Goethals, Sorenson, & Burns, 2004). However, it was using shady and unethical business practices, such as listing inflating its revenue and hiding debts in special purpose entities. Eventually, their faulty accounting caught up with them, and their market share plummeted. This was credited as one of the worst auditing failures.

As Bethany McLean and Peter Elkind portray in The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, there was a chain-reaction of events and a hole that dug deeper with time in the life-span of, at one time the world's 7th largest corporation, Enron. The events were formulated by an equation with many factors: arbitrary accounting practices, Wall Street's evolving nature and Enron's lack of successful business plans combined with, what Jeff Skilling, CEO of Enron, believed was the most natural of human characteristics, greed. This formula resulted in fraud, deceit, and ultimately the rise and fall of Enron.

Enron’s reported net income grew from $703 million in 1998 to $979 million in 2000, totaling 35.1% profit growth for the three-year period. Enron was among the leading of “high performing” companies by sustaining a high earnings growth insight. However, as Table 1 indicates, Enron’s reported profits were microscopic relation to revenues. Net income did not grow at anything near the same rate as revenues, which grew a remarkable rate of more than 3 times of the income from 1998 to 2000. As a result, there was a steady decline in net profit margin, from 2.2% in 1998 to a paltry 1% in 2001. Similarly, Enron’s gross profit margin

Enron Corporation was an energy company founded in Omaha, Nebraska. The corporation chose Houston, Texas to home its headquarters and staffed about 20,000 people. It was one of the largest natural gas and electricity providers in the United States, and even the world. In the 1990’s, Enron was widely considered a highly innovative, financially booming company, with shares trading at about $90 at their highest points. Little did the public know, the success of the company was a gigantic lie, and possibly the largest example of white-collar crime in the history of business.

The story of Enron begins in 1985, with the merger of two pipeline companies, orchestrated by a man named Kenneth L. Lay (1). In its 15 years of existence, Enron expanded its operations to provide products and services in the areas of electricity, natural gas as well as communications (9). Through its diversification, Enron would become known as a corporate America darling (9) and Fortune Magazine’s most innovative company for 5 years in a row (10). They reported extraordinary profits in a short amount of time. For example, in 1998 Enron shares were valued at a little over $20, while in mid-2000, those same shares were valued at just over $90 (10), the all-time high during the company’s existence (9).