The collapse of energy giant Enron.
Enron was born on July 1985, when Houston Natural Gas merged with InterNorth natural gas Company based on Omaha, Neb, and Kenneth Lay who became Enron's CEO in February 1986. In 1989, Enron began trading natural gas commodities. The company eventually became the largest merchant in North America. Enron had 21 thousand employees, operated a 25 thousand-mile gas pipeline system. It was listed as the seventh-largest company in the U.S, with a revenue of nearly 101 billion of dollars. Its bankruptcy occurred on December 2, where Enron had listed 24.7 billion dollars in assets. The collapse of energy giant Enron is the largest bankruptcy and one of the most shocking failures in United States corporate history. It embraced new technologies, established new methods of trading in energy and seamed to be a shining example of successful corporate America. But the company's success, were based on artificial inflated profits, dubious accounting practices, and some say fraud. The firm's success turned out to have involved an elaborate scam. Enron lied about its profits and stands accused of a range of shady dealings, including concealing debts. The profits eventually did not show up in the company's accounts. As the depth of deception unfolded investors and creditors retreated, forcing the firm into bankruptcy in December For Enron employees and retirees themselves, the consequences
effective cashflow management
Task 3 D1 It is now 12 months since Jane started the business. During the year she has had time to reflect on month to month trading. She has asked you as a friend to write her a report outlining the following: . What courses of action could be introduced to control the business's cash flow most effectively? 2. How will this contribute to the overall effective performance of the business operation and ultimately maximise cash flow. CASH FLOW FORECAST "Cash flow forecasting means preparing a cash flow statement for the future with predicted inflows and outflows." (Source: BTEC First Business) A business often prepares a cash flow forecast showing the money likely to flow into and out of the business in a given period. Forecasts are based on past experience of the business. Cash flow forecast include revenue such as cash sales, credit sales, loans and expenditures like wages, insurance, loan payment, etc. BUDGETARY CONTROL "A Budgetary control is a system of creating budgets, monitoring progress and taking appropriate action to achieve budgeted performance." (Source: www.brunswickis.co.uk) Budgetary control is a process of monitoring and analysing financial control within organisation. Budget "A budget is a plan, which is set out in numbers. It sets out figures that an organisation or company hopes to achieve in the future." (Source: THE TIMES 100) Budget is
Customer needs - Sainsbury.
Customer needs A range of different products and services Products: - Sainsbury has many ranges of products from groceries to toiletries. Sainsbury always try and make there products value for money. Check out queues: - Sainsbury always aim to minimise waiting time at the checkouts. Colleges of Sainsbury are multi skilled at busy times they are able to call on more colleagues to operate tills. Elderly people: Sainsbury realise that elderly people like to retain their independence by doing their own shopping. Sainsbury always put chairs for their older customers to rest. Employees at Sainsbury help elderly people pack their purchases and help them take them to their cars. Facilities for disabled people: - Sainsbury ensure that disabled customers are not offered a low standard of service. > They have disability parking spaces > Wheelchairs and specially adapted trolleys are available in every store and electric scooters in some. > They carry out disability audits and are currently installing hearing loops in stores. > They support the Shop Mobility scheme, where disabled people travel to a shopping centre by bus where they borrow wheelchairs for the day, giving them independence. > They were voted the best corporate chain store for their commitment to providing better service to our deaf blind customers at the Deaf blind Friendly Corporate Awards 2001. > They won
HBS Case Study - Starmedia Case
StarMedia Network Business: For the Spanish and Portuguese speaking population, the company provides various internet based services like chat, topical portals, online shopping, business news, sports news and so on. For this, the company owns six websites. Features: . Revenues are basically from advertisements on the sites. Advertisements are in 3 forms. Per thousand impressions: Here money is charged based on per thousand impressions on the advertisements. Sponsoring: Here the advertiser sponsors/pays a fixed amount of money for an area. Reciprocal Advertising: Here advertisers are given space on their website in exchange for StarMedia's advertisements on their newspapers/news channels. They are nothing but reciprocal transactions 2. The websites are free for the users. Nothing is charged for the content or to be part of the community. Answers: . There are two options available for recording the reciprocal transaction. a. The company can record $5.5 million in revenue from advertisement s and $5.5 million in expenses for advertising. b. The company need not record the transaction in its books but can mention this as Notes to accounts in the financial statements. 2. As the CFO, I would recommend that the company choose option (a) of the previous answer. This would mean that the gross profits of the company would look better by $5.5 million. The expense would
Would It Be Economically Beneficial to Britain to Introduce An Obesity Tax?
Would It Be Economically Beneficial to Britain to Introduce An Obesity Tax? Although obesity is a worldwide phenomenon in the 21st century, its impact varies between countries. Across the Channel in France less than one person in ten is obese, while in Japan it's less than one in twenty (see Figure 1 below). In England, at present 1 in 4 of all Britons have been declared medically obese - with obesity rates for both men and women surging in recent years (see Figure 2 below). It has recently been predicted by several tabloid newspapers and the BBC that - "Britain is an Obesity Time bomb"- 30th August 2009 (Sunday Express) with "Half of Britons Obese by 2050"-17th October 2007 (Daily Mail). However in this piece of coursework I intend to look at what has caused the rise in obesity over the last 50 years and whether an 'Obesity Tax' is a viable option. Ali Muriel - Taxing the Fat - 2005 - www.ifs.org.uk The Cause So why are the obesity rates in the UK rising at such an alarming rate? Many factors have been blamed such as the press, fast food outlets, TV's and a lack of exercise. However the implication seems to be that either people are getting hungrier (eating more) or they're getting lazier (exercising less). It is true that if you do less exercise and eat more calories then you will put on weight, therefore since more people are putting on weight it must mean that they
Tesco is the most successful supermarket chain in UK because of its well-known good services and product quality. To maintain this loyalty, they go greater lengths to improve and sustain quality.
BUSSINESS AT WORK COURSEWORK E Tesco is the most successful supermarket chain in UK because of its well-known good services and product quality. To maintain this loyalty, they go greater lengths to improve and sustain quality. Tesco define quality assurance and quality control as an ongoing approach to providing 100% customer satisfaction by providing error free, waste free and accident free products and services. To establish this quality process, each functions management staff attends meetings every day on total quality management and on leadership of quality between functions to achieve objectives. Within the company, a quality improvement team meets weekly to lead and monitor the quality process. The organisation as a whole has principles that it operates on to ensure quality mainly: - * A must to meet customer requirements and satisfaction all the time * Prevention of defects and errors of any kind * Measurements to verify the processes are meeting requirements as intended Improving quality in products is done in many ways. Starting with products produced by Tesco itself to meet their customer needs, products are inspected and tested at various points during production. Staff are highly trained to maintain quality and also keep personal hygiene so that they don't contaminate the products with germs. The products also have expiry dates which also monitored so
Discuss the effectiveness of supply side economics in improving the performance of the UK economy. Supply side economics is very effective on a long run basis, but may not be as good on a short run
ECONOMICS HOMEWORK Discuss the effectiveness of supply side economics in improving the performance of the UK economy. Supply side economics is very effective on a long run basis, but may not be as good on a short run. This means to improve the economy through competition between firms and markets, to increase efficiency and flexibility through labour and production and also to improve all macro tradeoffs. The effect all this will have on the AS curve is that the AS curve will shift to the right, showing that supply increases and inflation decreases. Also now more jobs will be available which means that the unemployment level will decrease. Supply side economics can do a lot good for the future generations, in a long run, but it may cause problems in a short run. In order to increase competition companies and firms would need to be privatised and deregulated, so that monopolist companies would have to face competition. Deregulation will force these monopolies into competition which will allow economic growth to improve. Also by having competition between the different companies will cause inflation to decrease as people would be now able to buy the same good or service but from a different and may be a cheaper company. This means that companies will need to reduce their prices in order to stay in the market or they will be shifted out of business. The bad side to supply
Economic growth is a necessary but not sufficient condition of economic development.'
'Economic growth is a necessary but not sufficient condition of economic development.' There is no single definition that encompasses all the aspects of economic development. The most comprehensive definition perhaps of economic development is the one given by Todaro: 'Development is not purely an economic phenomenon but rather a multi - dimensional process involving reorganization and re orientation of the entire economic and social system. Development is a process of improving the quality of all human lives with three equally important aspects. These are: . Raising peoples' living levels, i.e. incomes and consumption, levels of food, medical services, education through relevant growth processes. 2. Creating conditions conducive to the growth of peoples' self esteem through the establishment of social, political and economic systems and institutions which promote human dignity and respect. 3. Increasing peoples' freedom to choose by enlarging the range of their choice variables.' Economic growth may be defined as an increase in a country's ability to produce goods and services. Economic growth merely refers to an increase in the real Gross Domestic Product, or GDP per capita over a period of time. It is natural to be misled by the idea that economic growth is the key to economic development and perhaps a condition of development itself, but development is more than
Business Finance. There are a number of sources of finance, which businesses will need in order to start up a new business, make their business expand and buying materials required for their business.
AO1 Unit 3 Finance There are a number of sources of finance, which businesses will need in order to start up a new business, make their business expand and buying materials required for their business. - Mortgage: A Mortgage is a source of finance that is used to help fund purchase of a property. This is a very long-term method of borrowing money which requires some form of security. The money will later have to be paid back to the bank along with interest. If this money is not paid back there are people who are known as bailiffs who will come to your house to repossess the belongings needed to pay off the mortgage taken out. Mortgages can be borrowed by Company, Building society or Bank. Advantages The Advantages of this method are that the interest charges tend to be lower than other sources of finance. Also you can take out the money for long period of time, this can be easier for a business because it'll give them a chance to set up and keep the business running and then later on if the business becomes successful and makes a lot of money, and they can then pay off the mortgage which was taken out. You can Retain Ownership; this means instead of raising funds by selling a share in the property or the business to an investor you retain complete ownership. There is also Tax Advantage because interest expenses on your mortgage are tax deductible and are made with
Devaluation By Rughoobar Chidanand
Devaluation I. Introduction Devaluation, in economics, official act reducing the exchange rate at which one currency is exchanged for another in international currency markets. A government may choose to devalue its currency when a chronic imbalance exists in its balance of trade or overall balance of payments, which weakens the international acceptance of the currency as legal tender. The lowering of a currency value by devaluation occurs when a country has been maintaining a fixed exchange rate relative to other major foreign currencies. When a flexible exchange rate is maintained-that is, currency values are not fixed but are set by market forces-a decline in a currency's value is known as a depreciation. II. Causes The free-market value of a national currency is determined by the interaction of supply and demand. If the quantity of the currency demanded is greater than the quantity supplied, a nation will experience a balance of payments surplus. A balance of payments deficit exists when the quantity of currency supplied is greater than that in demand. The demand for a nation's currency depends on the amount of its exports, domestic investments, and assets held in domestic currency. A nation's currency supply on world markets depends partly on the amount of imports, investments abroad, and assets held in foreign countries. Ultimately, the supply of a currency
