Accounting Enron case analysis

Enron Finanical Statements

Enron Corp. and Subsidiaries
Balance Sheet
December 31,			2000		1999		1998
Assets
Current Assets
	Cash and cash equivalents		1,374		288		111
	Trade receivables, net		10,396		3,030		2,060
	Other receivables		1,874		518		833
	Assets from price risk management activities		12,018		2,205		1,904
	Inventories		953		598		514
	Deposits		2,433		81		0
	Other receivables		1,333		535		511
	Total Current Assets		30,381		7,255		5,933
Investments and Other Assets
	Investments in and advances to unconsolidated equity affiliates		5,294		5,036		4,433
	Assets from price risk management activities		8,988		2,929		1,941
	Goodwill		3,638		2,799		1,949
	Other		5,459		4,681		4,437
	Total investments and other assets		23,379		15,445		12,760
Property, Plant and Equipment at cost
	Natural gas transmission		6,916		6,948		6,936
	Electric generation and distribution		4,766		3,552		2,061
	Fiber-optic network and equipment		839		379		989
	Construction in progress		682		1,120		4,814
	Other		2,256		1,913		992
			15,459		13,912		15,792
	less accumulated depreciation		3,716		3,231		5,135
	Property, Plant and Equipment, net		11,743		10,681		10,657
	Total Assets		65,503		33,381		29,350
Liabilities and Shareholders' Equity
Current Liabilities
	Accounts payable		9,777		2,154		2,380
	Liabilities from price risk management activities		10,495		1,836		2,511
	Short-term debt		1,679		1,001		0
	Customers' deposits		4,277		44		0
	Other		2,178		1,724		1,216
	Total Current Liabilities		28,406		6,759		6,107
Long-term Debt			8,550		7,151		7,357
Deferred Credits and Other Liabilities
	Deferred income Taxes		1,644		1,894		2,357
	Liabilities from price risk management activities		9,423		2,990		1,421
	Other		2,692		1,587		1,916
	Total Deferred Credits and Other Liabilities		13,759		6,471		5,694
Minority Interest in Consolidated Subsidaries			2,414		2,430		2,143
Company-Obligated Preferred Securities of Subsidiaries			904		1,000		1,001
Shareholder's Equity
	Second preferrred stock		124		130		132
	Mandatorily Convertible Junior Preferred Stock		1,000		1,000		0
	Common Stock		8,348		6,637		5,117
	Retained Earnings		3,226		2,698		2,226
	Accumulated Other Comprehensive Income		(1,048)		(741)		(162)
	Common Stock Held in the Treasury		(32)		(49)		(195)
	Restricted Stock and Other		(148)		(105)		(70)
	Total Shareholder's Equity		11,470		9,570		7,048
	Total Liabilities and Shareholder's Equity		65,503		33,381		29,350
Enron Corp. and Subsidiaries
Income Statement
Year ended December 31,			2000		1999		1998
Revenues
	Natural gas and other products		50,500		19,536		13,276
	Electricity		33,823		15,238		13,939
	Metals		9,234		0		0
	Other		7,232		5,338		4,045
	Total Revenues		100,789		40,112		31,260
Cost and Expenses
	Cost of gas, electricy metals and other products		94,517		34,761		26,381
	Operating expenses		3,184		3,045		2,473
	Depreciation, depletion and amortization		855		870		827
	Taxes, other than income taxes		280		193		201
	Impairment of long-lived assets		0		441		0
	Total costs and expenses		98,836		39,310		29,882
	Operating income		1,953		802		1,378
Other income and deductions
	Equity in earnings of unconsolidated equity affiliates		87		309		97
	Gains on sales of non-merchant assets		146		541		56
	Gains on the issuance of stock by TNPC, Inc.		121		0		0
	Interest income		212		162		88
	Other income, net		(37)		181		(37)
	Total other income and deductions		529		1,193		204
	Income Before Interest, Minority Interests and Income Taxes		2,482		1,995		1,582
Other
	Interest and related charges, net		838		656		550
	Dividends on company-obligated preferred securities of subsidiaries		77		76		77
	Minority interests in (earnings) losses of unconsolidated subsidaries		154		135		77
	Income tax expense		434		104		175
	Other charges		1,503		971		879
Net income before cumulative effect of accounting changes			979		1,024		703
	Cumulative effect of accounting change, net of tax		0		(131)		0
Net income			979		893		703
Enron Corp. and Subsidiaries
Statement of Cash Flows
Year ended December 31,			2000		1999		1998
Cash Flow From Operating Activities
Reconciliation of net income to net cash provided by operating activities
	Net income		979		893		703
	Cumulative effect of accounting chagnes		0		131		0
	Depreciation, depletion and amortization		855		870		827
	Impairment of long-lived assets (including equity investments)		326		441		0
	Deferred income taxes		207		21		87
	Gains on sales of non-merchant assets		(146)		(541)		(82)
	Changes in the components of working capital		1,769		(1,000)		(233)
	Net assets from price risk managemetn activities		(763)		(395)		350
Merchant assets and investments
	Realized gains on sales		(104)		(756)		(628)
	Proceeds from sales		1,838		2,217		1,434
	Additions and unrealized gains		(1,295)		(827)		(721)
	Other operating activities		1,113		174		(97)
			4,779		1,228		1,640
Cash Flows from Investing Activities
	Capital expenditures		(2,381)		(2,363)		(1,905)
	Equity investments		(933)		(722)		(1,659)
	Proceeds from sales of non-merchant assets		494		294		239
	Acquisition of subsidiary stock		(485)		0		(180)
	Business acquisitions, net of cash acquired		(777)		(311)		(104)
	Other investing activities		(182)		(405)		(356)
	Net Cash Used in Investing Activities		(4,264)		(3,507)		(3,965)
Cash Flows from Financing Activities
	Issuance of long-term debt		3,994		1,776		1,903
	Repayment of long-term debt		(2,337)		(1,837)		(870)
	Net incrase (decrease) in short-term borrowing		(1,595)		1,565		(158)
	Net issuance (redemption) of company obligated preferred securities
	of subsidiaries		(96)		0		8
	Issuance of common stock		307		852		867
	Issuance of subsidiary equity		500		568		828
	Dividends paid		(523)		(467)		(414)
	Net disposition of treasury stock		327		139		13
	Other financing activities		(6)		(140)		89
	Net Cash Provided by Financing Activities		571		2,456		2,266
Increase (Decrease) in Cash and Cash Equivalents			1,086		177		(59)
Cash and Cash Equivalents, Beginning of the Year			288		111		170
Cash and Cash Equivalents, End of the Year			1,374		288		111
Changes in Components of Working Capital
	Receivables		(8,203)		(662)		(1,055)
	Inventories		1,336		(133)		(372)
	Payables		7,167		(246)		433
	Other		1,469		41		761
			1,769		(1,000)		(233)
Profitability Ratios
Asset Turnover		Sales	100789		40112
		Average Total Assets	49442		31366
			2.04		1.28
Profit Margin			460		657
			100,789		40,112
			0.46%	0.46%	1.64%
Return on Asset		Asset Turnover *
		Profit Margin
			0.93%		2.09%
Financing cost ratio			204		(5)
			460		657
			(0.44)		(0.01)
Capital structure			49,442		31,366
leverage			9,393		7,678
			5.26		4.09
Return on common			-2.17%		-0.07%
equity
Operating Cycle Ratios
Accounts receivable turnover			283,058		202,940
			94,517		34,761
			24.30		23.20
Inventory turnover
Account payable turnover
Deferred revenue turnover
Net operating cycle
Liquidity Ratios
Ability to cash flow from operations
to cover current debt and dividends
Free cash flow
Current ratio
Quick ratio(not including assets and
liab from price risk management)
Solvency Ratios
Total debt equity
Financing debt to equity
Long term ability of cash flow from
operations to cover debt and
dividends

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Enron Corp. and Subsidiaries

Balance Sheet

December 31,

Assets

Current Assets

Cash and cash equivalents

Trade receivables, net

Other receivables