Analyzing the Collapse of Billion-Dollar Companies

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Abstract
This article talks about comparative analysis of three big companies, which at one point of time were seen as giant organizations, making revenues in billions of dollars. These companies, doing very well in their own fields and stock market, suddenly collapsed or filed for bankruptcy. Everyone around it asks the same question, how can those billion dollar companies end up losing their money. There were a lot of open questions such as, who are the people behind the fraud, how this fraud could not be tracked before and corrected at right time, who is responsible for the current situation now, how much money did the companies lose, what will be the future of this company now, what will happen to employees, whose money is at risk now and …show more content…

The fraud came in to limelight when they could not explain improper records of $3.8 billion in their capital expenditure. Further investigation exposed that the company used to adjust the value of assets in their accounts which gave false impression to investors that company is improving quarter by quarter. They admitted to violate and adjust an earnings of $11 billion. Total fraud was reported to be $79.5 billion. WorldCom has filed for Chapter 11 bankruptcy in 2002.
Health South (Lupica, 2014), one of the biggest healthcare provider, committed fraud by increasing the value of their earnings on papers and increasing the values of their stock prices. Many investors were fooled by the company’s accounting figures. Health south used to fill the gap of actual figures and target figures by making false entries in their accounts. After this fraud got exposed, many high level executive were sent to jail who spent their precious years cleaning …show more content…

Once an organization is linked with any fraud, it’s difficult to come back and capture the market’s confidence. Investors don’t want to invest money out of fear. These frauds can be prevented if they are stopped at the right time and reported to the right and fair authority. People should stick to their ethical conscience if they see anything happening unethically and refrain from joining hands. As it is rightly said at the global leadership summit, “If it comes down to your ethics vs. a job, choose ethics, you can always find another job.” (As cited in Krawcheck,

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