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ENRON Case, Luis Alfonso Badial Díaz - Coggle Diagram
ENRON Case
- Ethics and Culture Decline (Pages 27–30)
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Led by Rebecca Mark, rapid growth in emerging markets.
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Traders given large bonuses, ignoring risk and HR policies.
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Reliance on off-balance sheet vehicles (e.g., JEDI, CalPERS) to raise funds.
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Risky expansion into unknown areas (e.g., metals).
Enron acquires Wessex Water (UK), creates Azurix.
Stripped of cash, loaded with hidden debt, lacked working capital.
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Early issues: mounting debt, gas price drops, unethical accounting.
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Enron praised for rising profits, but Lay lost control of operations.
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Focus on EPS growth, heavy use of stock options.
Board ignored warning signs, Andersen overlooked flawed reporting.
- Financial Pressure and Collapse Begins
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Result: hidden debt, inflated earnings, unsustainable business model.
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