...Is Enron Overpriced? More from Fortune FORTUNE 500 Current Issue Subscribe to Fortune It's in a bunch of complex businesses. Its financial statements are nearly impenetrable. So why is Enron trading at such a huge multiple? By Bethany McLean March 5, 2001 NEW YORK (FORTUNE) -- In Hollywood parlance, the "It Girl" is someone who commands the spotlight at any given moment -- you know, like Jennifer Lopez or Kate Hudson. Wall Street is a far less glitzy place, but there's still such a thing as an "It Stock." Right now, that title belongs to Enron, the Houston energy giant. While tech stocks were bombing at the box office last year, fans couldn't get enough of Enron, whose shares returned 89%. By almost every measure, the company turned in a virtuoso performance: Earnings increased 25%, and revenues more than doubled, to over $100 billion. Not surprisingly, the critics are gushing. "Enron has built unique and, in our view, extraordinary franchises in several business units in very large markets," says Goldman Sachs analyst David Fleischer. Along with "It" status come high multiples and high expectations. Enron now trades at roughly 55 times trailing earnings. That's more than 2 1/2 times the multiple of a competitor like Duke Energy, more than twice that of the S&P 500, and about on a par with new-economy sex symbol Cisco Systems. Enron has an even higher opinion of itself. At a late-January meeting with analysts in Houston, the company declared that it should...
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...On March 5, 2002, the Markkula Center for Applied Ethics convened a panel of four Santa Clara University business ethicists to discuss the Enron scandal. Panelists included Kirk O. Hanson, executive director of the Ethics Center and University Professor of Organizations and Society; Manuel Velasquez, Dirksen Professor of Business Ethics, Department of Management; Dennis Moberg, Wilkinson Professor of Management and Ethics, and Martin Calkins, S.J., assistant professor of management. Edited excerpts from their conversation appear below: Manuel Velasquez: What went wrong at Enron? In ethics, explanations tend to fall into three categories: personal, organizational, and systemic. Personal explanations look for the causes of evil in the character of the individuals who were involved. Did this happen, for example, because the people involved were vicious? Were they greedy? Were they stupid? Were they callous? Were they intemperate? Were they lacking in compassion? Organizational explanations look for causes in group influences. They take seriously the ways that we influence each other when we do things as a group. These influences include the shared beliefs that groups develop about who is important, what is permissible, and how things are done here in this group. These include also the shared values that we call a group culture, the rules or policies groups develop to govern their interactions with each other and the rest of the world. Finally, systemic explanations look for causes...
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...ISSUE: Jeremy Bloom, a football player for the University Colorado (UC) and also a world-class skier in the Olympics before enrolling at UC. During the Olympics Bloom appeared on MTV, and thereafter was offered various paid entertainment opportunities. Even though Bloom is getting paid entertainment he is not under the NCAA for world-class skier for the paid opportunity; such as host show on Nickelodeon, commercial certain ski equipment and he contracted with Tommy Hilfiger for modeling clothes. Which bring us to the case of Jeremy Bloom Plaintiff-Appellant vs. National Collegiate Athletic Association and unincorporated associations; and the University of Colorado a body corporate. Defendants-Appellees. In his complaint, Bloom alleged; (1) as a third-party beneficiary of the contract between the NCAA and it members, he is entitled to enforce NCAA bylaws permitting him to engage in and receive remuneration from a professional sport different from his amateur sport; (2) as applied to the facts of this case, the NCAA’s restrictions on endorsements and media appearances were arbitrary and capricious; and (3) those restrictions constituted improper and unconscionable restraint of trade. RULES:...
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...------------------------------------------------- Top of Form The Rise and Fall of Enron | The rise and fall of Enron is an important, complex story. In its early days Enron did the right things for the right reason and garnered substantial credibility. Later successful operations were replaced with the illusion of successful operations. In the last phases Enron milked its credibility to sustain operations through loans. When its credibility with lenders crumbled the loan funds dried up and the corporation imploded. It is reminiscent of the old cartoon of the wily coyote who runs off a cliff. For a period of time after the coyote leaves solid ground he is suspended and tries by furious windmilling to stay suspended but eventually plummets to the ground. In Enron's case the magical period of suspension after it had left the solid ground of economically profitable operation lasted for years. The History of the Natural Gas Industry Natural gas, primarily methane, was originally an unwanted byproduct of petroleum extraction. For many years when an oil well vented gas it was simply flared; i.e., burned off. But people eventually learned the uses and virtues of natural gas and built pipelines to convey it to the cities where it took the place of coal gas for residential and industrial lighting and heating. The market for natural gas has three major types of economic units: 1. Suppliers, 2. Customers, 3. Pipeline companies. In a competitive market the fluctuations in the supply of...
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...Developing & Implementing a Measurable Strategic Performance Management Framework and Automated Balanced Scorecard in a Medical Devices Company [pic] Implementation Case Study Becton Dickinson ANZ Copyright This publication is © Copyright 2004 ASVP Consulting Pty Ltd with all rights reserved. Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means including information storage and retrieval systems, without the prior written consent of ASVP Consulting Pty Ltd. Trade Marks Advanced Strategic Value Propositions™ is a trade mark of ASVP Consulting Pty Ltd. PulseSuite®, PulseManager®, PulseFinder® and Primed Online® are registered trade marks of Primed Online Pty Ltd. PulseProject™ is a trade mark of Primed Online Pty Ltd. Becton Dickinson, BD, and Helping All People Lead Healthy Lives are trademarks of Becton Dickinson Pty Ltd. Acknowledgements The kind assistance of Michael Lyon, CEO and the management team of BD Australia, and Grant Alecock, General Manager, and the management team of BD NZ is gratefully acknowledged. ASVP Consulting Pty Ltd ASVP Consulting Pty Ltd has written this independent case study on the implementation of a Balanced Scorecard Framework Solution in order to quantify the benefits accruing to BD and to highlight the potential benefits available to other organisations considering the implementation...
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...The Ethics Thing: Why It Matters More in Hard Times and Why It’s So Hard to Do What Makes Good and Smart People Do Dumb and Unethical Things? Professor Marianne M. Jennings W.P. Carey School of Business Ethical Lapses • • • • • • • • • • • • • • • • • • • • • • Student loan lenders: Sallie Mae and 17 universities Adelphia Boeing Cendant Computer Associates Tyco International T I t ti l General Electric Global Crossing Merrill Lynch Enron Qwest WorldCom Royal Shell Nortel Krispy Kreme Refco UnitedHealth Group Merck Chiquita World Bank BP Madoff Investment Securities • • • • • • • • • • • • • • • • • • • • • • • • • • • AT&T Titan Xerox Kmart Citigroup Lucent ImClone Arthur Andersen HealthSouth Royal Ahold Parmalat Apollo Group Marsh & McLennan AIG (twice)(Putnam)(Mercer) Fannie Mae (twice) KPMG (twice) GM Options scandals (200 companies) HP Universities and travel Siemens Countrywide Financial Société General Milberg Weiss Bear Stearns Satyam (India) Stanford Investments Jennings 1 Government Issues • • • • • • • • • • • • • • • • • • • • • • • • • • • • Illinois – Gov. Ryan Illinois – Blago Baltimore’s mayor Detroit’s mayor – Kwame Kilpatrick San Diego -- $1.1 billion pension fund deficit; skimming to meet city budget Connecticut – Gov. Rowland Chicago – Mayor’s office and contracts Embezzlement – BLM E b l t Former Delay aides and guilty pleas Abramoff Duke Cunningham -- $2.4 million from defense contractors State crime labs and scandals Tom DeLay Clark...
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...Developmental Editor: Daniel Noguera Editorial Assistant: Ruth Belanger Sr. MarComm Manager: Jim Overly Marketing Manager: Clinton Kernen © 2009, 2006 South-Western, a part of Cengage Learning ALL RIGHTS RESERVED. No part of this work covered by the copyright herein may be reproduced, transmitted, stored or used in any form or by any means graphic, electronic, or mechanical, including but not limited to photocopying, recording, scanning, digitizing, taping, Web distribution, information networks, or information storage and retrieval systems, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the publisher. For product information and technology assistance, contact us at Cengage Learning Academic Resource Center, 1-800-423-0563 For permission to use material from this text or product, submit all requests online at www.cengage.com/permissions Further permissions questions can be emailed to permissionrequest@cengage.com Text Permissions Manager: Timothy Sisler ExamView® and ExamView Pro® are registered trademarks of FSCreations, Inc. Windows is a registered trademark of the Microsoft Corporation used herein under license. Macintosh and Power Macintosh are registered trademarks of Apple Computer, Inc. used herein under license. Technology Project Editor: Rob Ellington © 2009 Cengage Learning. All Rights Reserved. Content Project Manager: Lysa Kosins Manufacturing Coordinator: Doug Wilke Production Service:...
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...Journal of Economic Perspectives—Volume 17, Number 2—Spring 2003—Pages 3–26 The Fall of Enron Paul M. Healy and Krishna G. Palepu F rom the start of the 1990s until year-end 1998, Enron’s stock rose by 311 percent, only modestly higher than the rate of growth in the Standard & Poor’s 500. But then the stock soared. It increased by 56 percent in 1999 and a further 87 percent in 2000, compared to a 20 percent increase and a 10 percent decline for the index during the same years. By December 31, 2000, Enron’s stock was priced at $83.13, and its market capitalization exceeded $60 billion, 70 times earnings and six times book value, an indication of the stock market’s high expectations about its future prospects. Enron was rated the most innovative large company in America in Fortune magazine’s survey of Most Admired Companies. Yet within a year, Enron’s image was in tatters and its stock price had plummeted nearly to zero. Exhibit 1 lists some of the critical events for Enron between August and December 2001—a saga of document shredding, restatements of earnings, regulatory investigations, a failed merger and the company filing for bankruptcy. We will assess how governance and incentive problems contributed to Enron’s rise and fall. A well-functioning capital market creates appropriate linkages of information, incentives and governance between managers and investors. This process is supposed to be carried out through a network of intermediaries that include professional...
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...bepress Legal Series Year Paper Enron and the Special Purpose Entity. Use or Abuse? The Real Problem - The Real Focus Neal F. Newman Texas Wesleyan Law School This working paper is hosted by The Berkeley Electronic Press (bepress) and may not be commercially reproduced without the permission of the copyright holder. http://law.bepress.com/expresso/eps/1165 Copyright c 2006 by the author. Enron and the Special Purpose Entity. Use or Abuse? The Real Problem - The Real Focus Abstract In December of 2001, Enron Corporation filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code; one of the largest corporate bankruptcy filings at that time. When the investigations commenced and the tangled Enron web was unraveled, it was discovered that Enron had perpetrated a very sophisticated form of accounting fraud through its repeated use of what are referred to as Special Purpose Entities (“SPEs”). In their most basic forms, SPEs are business entities formed for the purpose of conducting a well specified activity such as construction of a gas pipeline, or collection of a specific group of accounts receivable. However, because of their complex nature, SPEs can be used to manipulate a corporation’s financial results, which was the primary use for which Enron employed the SPE structure. As a result, the investment and financial community has cast a dark cloud over the special purpose entity, depicting the SPE as an inherently evil structure whose only purpose is to...
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...Overseas sourcing, without risk Here are some rules to keep your supply chain problem-free and avoid negative publicity at home and abroad Zero tolerance Shut the door firmly on illegal activity johnkworks/Shutterstock.com Managing fraud and corruption risk and protecting brand reputation is becoming increasingly important when sourcing from overseas destinations. With the changing enforcement milieu, extra-territorial statutes and zero tolerance around acts of bribery and corruption, brands need to constantly monitor their supply chains. These supply chains transcend international boundaries, with business partners (suppliers, vendors, service providers and such) being located across geographies, having different cultures and work ethics. Therefore, it is a challenge for any company to know and curb supply chain risks. To implement the code of conduct uniformly throughout the supply chain, companies have to change the mindsets of employees and business partners overseas through continuous learning and development. Winning and expanding business overseas could be a time-consuming and arduous task in some cases. Facilitation payments and kickbacks are easy quick fixes. Many sourcing destinations are countries that rate low on the Transparency International index, where vulnerabilities around vendor kickbacks and bribery of officials are prevalent. Mounting business pressures, aggressive timelines to complete projects and high costs involved have the tendency to spur unethical...
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...V.Srikanth & Dr.R.Dhanapal A Business Review of E-Retailing in India V.Srikanth Assistant Professor / MCA Dept PES Institute of technology, Bangalore-560085, India vedanthamsri@yahoo.co.in Dr.R.Dhanapal Professor, Department of Computer Applications Easwari Engineering College, Ramapuram Chennai - 600089, Tamilnadu, India drdhanapal@gmail.com Abstract As a professor in computer science I am very much interested in training my students in e-Commerce and prepared myself for an in depth research in this area and to present a quick journal about e-Retailing concepts / framework, how an organization can start e-Retailing business quickly. Its Pro’s & Con’s, how to make the e-Retailing venture successful. How retailers should plan / experience to achieve varying success by leveraging the internet technology. How to incorporate traditional retails practices with Internet technology. And strive for success in India. How internet is used by users and its use for online shopping. It serves as a best article for all the readers across the globe. Keywords: E-Retailing,E-tailing, E-Commerce, Online Store, Retail, E-Business. 1. INTRODUCTION E-Commerce is a huge domain on conducting business over internet and e-retailing is part of it. When we discuss on digitally / Internet enabled commercial transactions between organizations and individuals using latest web technologies as per the policies of the Organization it takes the form of e-business. Nowadays, 'e' is gaining...
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...City Link are providing specialist logistic and delivery solutions to the public and commercial customers Citi, since 1969. They are one of the leading courier services, sending 76,000,000 items per annum via an ever growing fleet of over 2,500 vehicles. “City Link’s annual revenues exceeds £320m, however the company has notoriously been making losses despite its high sales, with £25 million of losses reported in just nine months 2011, and £26 million in the year of 2012. In the response of this, Rentokil Initial ,who acquired the company in 2006,sold the business in 2013 to Better Capital, a private equity group, who are now investing in the company in the hope of seeing growth” www.track-parcel.co.uk/citylink The company offer a large packet of services to their costumes: standard delivery services, UK next day delivery, international air express, international road express and opportunity to add insurance cover for fragile or valuable items, or to use online booking system where people can send the occasional parcel without opening any kind of account or having a formal arrangement with the company. “The national network is supported by dedicated account management and costumer services team, which benefits our customers by working with a partner who provides a reliable, secure and flexible services. The company vision is to maintain our position as the expert within the UK parcel market” LO1 Understand the different perspectives of human resources management. ...
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...[pic] Department of Education and Training RESEARCH ON HUMAN LEARNING Published by the Department of Education and Training © State of Victoria, 2004 All rights reserved. Except under the conditions described in the Copyright Act 1968 of Australia and subsequent amendments, no part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical and photocopying, recording or otherwise, without the prior permission of the copyright holder. Address inquiries to: Research and Development Branch Office of Learning and Teaching Department of Education and Training Level 2, 33 St Andrews Place GPO Box 4367 Melbourne 3001 Acknowledgments This resource has been developed by the Office of Learning and Teaching, Department of Education and Training, Victoria, 2004 Authors Sandra Mahar and Maddy Harford Contributions This publication was developed by the Research and Development Branch, Office of Learning & Teaching for the Department of Education and Training. Contents INTRODUCTION: THE IMPORTANCE OF LEARNING IN THE KNOWLEDGE ECONOMY 4 Defining Learning 5 Overview of the paper 6 THEORIES OF LEARNING 7 Cognitive Learning Theories 7 Social Learning Theories 7 Constructivist Theories 8 Experiential Learning 9 Adult Learning, or Andragogy 9 Multiple Intelligences 10 Situated Learning Theory and Communities of Practice 10 FACTORS AFFECTING...
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...Enron and World Finance A Case Study in Ethics Edited by Paul H. Dembinski, Carole Lager, Andrew Cornford and Jean-Michel Bonvin Enron and World Finance Also by Observatoire de la Finance From Bretton Woods to Basel Finance & the Common Good/Bien Commun, no. 21, Spring 2005 Ethics of Taxation and Banking Secrecy Finance & the Common Good/Bien Commun, no. 12, Autumn 2002 Will the Euro Shape Europe? Finance & the Common Good/Bien Commun, no. 9, Winter 2001–2 Dommen, E. (ed.) Debt Beyond Contract Finance & the Common Good/Bien Commun, Supplement no. 2, 2001 Bonvin, J.-M. Debt and the Jubilee: Pacing the Economy Finance & the Common Good/Bien Commun, Supplement no. 1, 1999 Dembinski, P. H. (leading contributor) Economic and Financial Globalization: What the Numbers Say United Nations, Geneva, 2003 Enron and World Finance A Case Study in Ethics Edited by Paul H. Dembinski Carole Lager Andrew Cornford and Jean-Michel Bonvin in association with the Observatoire de la Finance Selection, editorial matter and Chapters 1, 2 and 16 © Observatoire de la Finance Remaining chapters © contributors 2006 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence ...
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...Construction skills development in the UK: transitioning between the formal and informal Paul W Chan Northumbria University, Newcastle upon Tyne, UK paul.chan@unn.ac.uk ROBERT C MOEHLER Northumbria University, Newcastle upon Tyne, UK robert.moehler@unn.ac.uk RESEARCH REPORTED HERE IS PART OF A WIDER STUDY THAT SEEKS TO EXAMINE THE PRACTICES INVOLVED IN ENCOURAGING AND ENABLING EMPLOYERS TO ENGAGE WITH THE SKILLS DEVELOPMENT AGENDA. A SERIES OF EXPLORATORY INTERVIEWS AND ETHNOGRAPHIC OBSERVATIONS REVEAL POTENTIAL DISCONNECTIONS BETWEEN SKILLS POLICIES AT THE GOVERNMENTAL LEVEL AND WHAT ACTUALLY HAPPENS IN EMPLOYER PRACTICES REGARDING SKILLS DEVELOPMENT. ON THE ONE HAND, THE FORMAL EDUCATION AND TRAINING SYSTEM FOCUSES ON SUCH TARGETS AS THE ATTAINMENT OF NARROWLY-DEFINED OCCUPATIONAL STANDARDS, LEVELS OF COMPETENCE, AND QUANTITATIVE PERFORMANCE MEASURES LIKE COMPLETION RATES. ON THE OTHER HAND, THE SOCIALISED CONCEPT OF SKILLS DEVELOPMENT TAKES PLACE INFORMALLY AT THE WORKPLACE THROUGH ON-THE-JOB TRAINING AND MENTORING RELATIONSHIPS BETWEEN SENIOR AND JUNIOR EMPLOYEES. BOTH THE FORMAL AND INFORMAL SYSTEMS APPEAR TO CO-EXIST ALONGSIDE EACH OTHER, ALTHOUGH TENSIONS ARE MOUNTING IN TERMS OF CONFIDENCE THAT EMPLOYERS AND THE WIDER INDUSTRY PLACE ON THE EFFICACY OF THE FORMAL SYSTEM. Keywords: informality, skills development practices, skills policy, training and education. INTRODUCTION The UK construction industry faces an enduring problem of skills shortages...
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