Introduction: The financial crises of 2007-2008 and also knows as the Global Financial Crisis, is considered to have been the worst financial crisis since the Great Depression back in the 1930’s. The Global Financial Crisis affected a lot of large companies, financial institutions, banks, central banks, insurers, and many more entities around the world and many of these entities declared bankruptcy and went out of business while some where absorbed by other financial institutions, some also converted into financial holding companies. The main cause of the Global Financial Crisis was the United States housing bubble, which caused the value of securities tied to U.S real state pricing to fall down which damaged financial institutions globally.
Timeline: Refco Inc. announced on October 10, 2005 that it’s CEO and chairman, Phillip R. Bennett had hidden information about $430 million in bad debts from the company's auditors and investors, and that now he had agreed to take a leave of absence. It was discovered through an internal review over the preceding weekend that a receivable was owed to the company by an unnamed entity that eventually turned out to be controlled by Mr Bennett, as much as approximately US$430 million. It was later known that, Bennett had been buying bad debts from Refco so that it would need to write them off, and he was paying for the bad loans with money borrowed by Refco itself. How he managed to pull this off is, at the end of every quarter he had arranged
In June 1984, the annual accounts, which were done with the help of the accountant Dickman, were issued to the shareholders, which now included Caparo. Caparo reached a shareholding of 29.9% of the company, at which point it made a general offer for the remaining shares, as the City Code's rules on takeovers required. Once it had control, Caparo found that Fidelity's accounts were in an even worse state than had been revealed by the directors or the auditors. Caparo sued Dickman for negligence in preparing the accounts and sought to recover its losses by determining the difference in value between the company as it had and what it would have had if the accounts had been
On October 24 of 1929, otherwise known as Black Thursday, a record 12,894,650 shares were traded. Investment companies went into scramble as they tried to balance the market. However, the next week, on “Black Tuesday”, the stock market had officially collapsed. By then, around 16,410,030 shares were traded in the New York Stock Exchange. Billions of dollars were lost and many citizens jobs were affected from the collapse.
Being in the middle of recreating a new a strategic position for the polaroid brand, the company was suffering losses left and right. From the death of Land in 1991, to new competitors entering the market, Polaroid cut cost where they could and did their best to “just” stay afloat until filing for bankruptcy in October of 2001. After fighting to keep the brand alive, in 2008 the company announced it would stop producing instant film, ending the brand (Staff, B). Revitalization of
In the Enron case the stakeholders that suffered most of the losses of the company were its employees who lost all their retirement funds invested in the form of Enron stocks, and the general public who have invested their funds in the company’s stocks and lost all their investments when overnights the stock prices of the Enron dropped from $90 to less than $1. Furthermore, a big question was raised on the efficiency and effectiveness of the regulatory authorities especially on the working of the US SEC. after the collapse of the Enron the public trust was badly shaken which affected the overall economy
The United States faced an economic crisis that led to the loss of billions of money in the stock market. American life turned down to the extent that banks fell and investors could no longer invest in the country. Many companies closed, and millions of citizens lost their job. Crime became a way of life for many during the Great Depression as it was almost impossible to find work. The industrial production in the United States declined 47% and gross domestic product (GDP) fell 30% (Ohanian, 2017).
Question one Ratio plays important role in analysing company’s performances, whether the company made improvement from previous year or to compare against other company similar industry. It also shows investor especially for creditors such as bank to know their financial performances. From the question, the bank manager told that ABC Limited has too low working capital and too high gearing ratio. Working capital relates the company’s current assets and current liabilities. It measures the ability of the company to pay their current liabilities with their current assets.
Enron was also able to hide their losses through the transfer of troubled assets which were falling in value to the SPEs, which means the losses were kept off the books. Enron has been conducting business through thousands of SPEs, and some of them were LJM Cayman LP and LJM2 Co-Investment LP. LJM partnerships invested in another group of SPEs, called the Raptor Vehicles, which were designed to hedge Enron investment in a bankrupt broadband company, Rhythm Net Connections. Enron issued common stock in exchange for a note receivable of $1.2 billion as a part of the capitalization of the Raptor entities. Enron increased notes receivable and shareholder’s equity to reflect this transaction, which violate the GAAP.
LATER After a delay of over two years, the deal was finally finalized on 19th October, 2012. The original structures of the deal went through changes due to concerns raised by the banking regulator. The Axis Bank cut the valuation of the transaction by almost one-third of the original deal size to Rs 1396 Crore in view of the then prevailing market conditions. Axis Bank launched a new subsidiary company named Axis Capital Ltd, which housed the investment banking and institutional equities businesses. Manish Chokhani was made Managing Director and Chief Executive Officer of the proposed entity, while Jagdish Master, Enam co-founder, continued to provide guidance, as a board member of the wholly-owned subsidiary.