The now defunct Enron Corporation, headquartered in Houston, Texas, provided products and services for natural gas, electricity, and communications to wholesale and retail customers. Enron’s operations were conducted through a variety of subsidiaries and affiliates that involved transporting gas through pipelines, transmitting electricity, and managing energy commodities. The following data were taken from Enron’s December 31, 2000 financial statements. In millionsTotal revenues ………………. $100,789Total costs and expenses …………… 98,836Operating income ………………. 1,953Net income ………………… 979Total assets ………………… 65,503Total liabilities ………………. 54,033Total stockholders’ equity …………… 11,470Net cash flows from operating activities ……… 4,779Net cash flows from investing activities ……… (4,264)Net cash flows from financing activities ……… 571Net increase in cash …………….. 1,086At the end of 2000, the market price of Enron’s stock was approximately $83 per share. By March 15, 2002, Enron’s stock was selling for $0.22 per share.Review the preceding financial statement data and search the Internet for articles on Enron Corporation. Briefly explain why Enron’s stock dropped so dramatically in such a short time.View Solution:
The now defunct Enron Corporation headquartered in Houston Tex



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