The Enron Scandal - A Simple Overview — Transcript

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1. 0:06Most of us are familiar with the infamous Enron scandal
2. 0:11and here is what I'm guessing most people know about it.
3. 0:14The company cooked the books and pull off some shady accounting tricks
4. 0:18They were caught
5. 0:19and now cease to exist as a result.
6. 0:21But this is a very thin understanding of the subject
7. 0:25There was so much stuff that went down I can't even do it justice
8. 0:29in a short video like this.
9. 0:31If you wanna become an expert on it, theres a movie I can recommend.
10. 0:34It's called "Enron: the Smartest Guys in the Room".
11. 0:38It's nearly two hours about the scandal
12. 0:40and honestly I think that's even rushing it.
13. 0:43The entire "ordeal" is so complicated
14. 0:46that there can easily be an entire college course centered around it
15. 0:49and that course would be for the advanced students.
16. 0:52Wouldn't it be great
17. 0:54If someone created a youtube video that
18. 0:56concisely explained it in a way that is both entertaining and easy to understand?
19. 1:01Enron formed trough a merger in 1985
20. 1:04between two energy companies.
21. 1:05That's what Enron was by the way, an energy company.
22. 1:09When I say that it's a huge simplification
23. 1:12because Enron was envolved in so many things, in complex ways
24. 1:15that the average person didn't even come close to understanding
25. 1:18exactly what the company did.
26. 1:20It was founded by a man named Ken Lay.
27. 1:23You may want to remember that name.
28. 1:25Now let's fast forward around to the year 2000.
29. 1:28It was a fantastic company and very attractive for investors.
30. 1:32At the time they were thought of as being
31. 1:33one of the world leader in business.
32. 1:36I would say it's like how a few companies like
33. 1:38Apple or Google today, but that's not even close
34. 1:41to how amazing Enron was.
35. 1:43They were making money and growing at a rate that no-one had ever seen before
36. 1:47So here, i'll pretend to be a financial advisor helping you decided which stock you may want to buy
37. 1:53Here we go
38. 1:54Ive looked over all the numbers and I strongly advise you
39. 1:57to invest in Enron.
40. 1:58The one with the fastest growing and most respected companies around today
41. 2:02I'll just show you a few numbers to support my advise
42. 2:05As a financial advisor, I look at companies revenue,
43. 2:08debts and past stock trends
44. 2:11Heres enron's revenue over the past five years
45. 2:14just look at that growth its quicker than I'd ever seen
46. 2:17I also checked out their debt an its very reasonable
47. 2:20Compared to their equity