Enron and Apple Comparison

In: Business and Management

Submitted By wera
Words 2729
Pages 11
Enron and Apple – A Financial Tale of Failure and Success

Enron and Apple – A Financial Tale of Failure and Success

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Abstract This paper analyzes accounting concepts that contributed to Enron’s demise and inclusion on the list of Fortune’s top ten largest bankruptcy filings in US, and in contrast, looks at Apple’s inclusion on the list of Fortune’s top ten most admired companies and reason for its success.

Enron and Apple – A Financial Tale of Failure and Success

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The Fall of Enron Introduction As a Fortune 500 company, Enron Corporation made the “Fortune’s Top Ten” lists seven times: six times as “America’s Most Innovative Company” and one, and last time, as the “Top Ten largest bankruptcy in the US” (Fortune Magazine, 2001, 2009). Within 10 months, Enron’s stock declined from $83 to 26 cents. When the nation's largest energy, electricity and natural gas company filed for bankruptcy in December 2001, shareholders lost tens of billions of dollars, over four thousand employees lost their jobs, and thousands more lost their retirement savings (Ferrell, Fraedrich & Ferrell, 2011, pg 419).

Enron’s History and Business Model Enron was formed in 1985 though the merger of two natural gas companies and initially earned its revenue by producing and distributing natural gas. Under the leadership of Ken Lay and later Jeffrey Skilling, the gas company evolved adding electricity, communications, and energy trading to its offerings and continued its development, construction, and operation of power plants and pipelines (Ferrell, Fraedrich & Ferrell, 2011, pg 420). By 2000, Enron’s wholesale energy income represented ninety-three percent of revenues. This included the trading of gas and electricity in US and Europe. Four percent of revenue came from the gas and electricity distribution, and three came from broadband services.

From “Most Innovative” to…...

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