Enron
ENRON
In 2000 Enron was the world’s leading corporation in selling natural gas with an estimated worth in sales of around one hundred billion dollars and the company showed only signs of progressing. Within one year the company went completely bankrupt and forty of their top employees were arrested or are in jail awaiting trials. How can a multinational corporation with steadily increasing revenue take such a drastic fall into bankruptcy and how did no one see this coming? In the end Enron knew exactly what was in their future and hid it from the public by allocating their debt and with a loophole in their accounting, it turned out to be one of the biggest cover ups in the stock markets history.
In 1985 Houston Natural Gas merged with InterNorth, which became what we now know as Enron. In the following years they had become one of the world’s largest natural gas merchant’s and eventually branched out to coal and steel. Enron’s success exploded into the scene with catastrophic increasing sales and revenue that was competing some of the most powerful companies, such as Microsoft and Exxon Mobil. Between 1996 and 2000 their revenue increased from 13.3 billion to 100.8 billion (fowler). This was an astronomical increase and almost seemed too good to be true. As the company grew in size, power, and prestige, Enron began engaging in ever more complicated contracts and undertakings. Illegal, off-the-balance-sheet transactions and partnerships were helping to conceal Enron’s increasing debt problem. By the time investors, employees, and the public learned of the company’s crisis, the downward spiral was virtually unstoppable.
Although executives at Enron were ruthless entrepreneurs, they were very good and precise at what they did. Enron and their top executive’s main and only goal was to increase profit for themselves by any means necessary. Enron’s greatest tool for concealing their debt and in the end was their ultimate...
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