San Diego Mesa College Financial Environment Enrons Collapse

San Diego Mesa College Financial Environment Enrons Collapse Discussion

San Diego Mesa College

Question Description

 

1- Prior to beginning work on this discussion, please read the articles: Researching Public Companies Through EDGAR: A Guide for Investors (Links to an external site.), the Beginners’ Guide to Financial Statement (Links to an external site.) from the Security & Exchange Commission (SEC) and the 12 Things You Need to Know About Financial Statements (Links to an external site.).

  • If you are thinking of purchasing Amazon.com’s (NASDAQ: AMZN) stock, or any stock, how can you decide what the stock is worth?
  • If you manage Apple’s Inc. (NASDAQ: AAPL) credit department, how should you decide whether to extend a new client’s credit limit?
  • If you are a financial executive of Sony Corp (NYSE: SNE), how do you decide whether the company should employ aggressive capital investments in global business areas?

After assessing the above situations, discuss the role of the income statement, balance sheet, and stockholders equity in business decision making to formulate plans & policies, shareholding, expansion of credit, investment decisions, and taxation decisions in a minimum post of at least 200 words.

LINKS:

https://www.sec.gov/oiea/Article/edgarguide.html

https://www.sec.gov/reportspubs/investor-publications/investorpubsbegfinstmtguidehtm.html

https://www.investopedia.com/articles/basics/06/financialreporting.asp

2- Prior to beginning work on this discussion, read the article Enron Scandal: The Fall of a Wall Street Darling (Links to an external site.) from Investopedia, the article Deconstructing Enron’s Collapse (Links to an external site.) from McCullough Research, and Enron’s 2000 10-K Report (Links to an external site.) retrieved from the SEC. The scandal of Enron Corp. shook Wall Street to the core and its collapse affected thousands of employees. At Enron’s peak, the market price of its stock was worth $90.75 per share; when Enron declared bankruptcy on December 2, 2001, the stock was trading at $0.26 (Investopedia, 2018). For Enron’s demise McCullough Research (2002) suggested three scenarios: (1) the Last of the Dot Coms, (2) a Ponzi scheme, and (3) Barings Bank.

In an initial post of a minimum of 100 words, discuss how Enron’s superficial financial reporting combined with an indulgent financial environment have caused Enron’s collapse.

LINKS:

https://www.investopedia.com/updates/enron-scandal-summary/

https://www.mresearch.com/pdfs/11.pdf

https://www.sec.gov/Archives/edgar/data/1024401/000102440101500010/ene10-k.txt

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