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Managing/Manipulating the Numbers
Finance & Accounting
Pages 3 (753 words)
Managing/Manipulating the Numbers There are numerous reasons why a company attempts to manage its numbers through various tools and methods. These methods include: Inflating the prices Window dressing Fake transactions Over valuing / Under valuing Obscuring expenses Non disclosure etc These may not only be for showing better profits or showing better position of the company, but also to disclose less income and less assets of the company.
The Enron Debacle The higher management at well known Enron Corp. never looked concerned or disrupted with how people of the world looked at their business applications, although no one would have thought of such a shocking conclusion for the nation's chief and most inventive energy dealer. At least on the face of it, Enron's off-balance-sheet manipulation barely seems the stuff that would cavern a corporate organization this huge. (“The Enron Debacle” 2). As a result of the practices followed by the company, the shareholders lost almost $11 billion when the share price of the Enron's stock, which has gained a high of US$90 per share in the middle of 2000, crashed down to below $1 at the end of 2001. George J. Benston in his book describes the value of the assets of Enron, which at that time stood at a staggering $63.4 billion, framed it as the major corporate bankruptcy in the history of U.S. until WorldCom next year came up to take its place (10). ...
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