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So how did Enron make all of their money? Throughout the 1980's, they were buying and selling all of the natural gas futures. This was all done based on speculation of gas prices, which was hyped up after it was deregulated. Enron then got their hands onto the electricity market, which then was also deregulated. Between the years of 1999 and 2000, they merely doubled sales, and from 1996 to 2000 sales grew an astonishing 57%. If they would have into the year 2002 they would have officially become second-largest corporation in the world, in terms of sales. "Enron's reported revenue was based on its exploitation of a loophole in accounting rules that allowed it to book revenue from huge energy-derivative contracts at their gross value, not their net value as is done with other securities transactions." (Forbes, 1/15/02) Basically instead of reporting the spread difference (between bid and ask price), they would report the entire sale price instead. Many energy companies used this accounting style that was legal, but made the numbers look astronomical. .
The accounting methods used by Enron were definitely the major result in the collapse the corporation took in 2001. Besides accounting, lack of training in the organization also was a factor along with ignoring ethical judgment. Not being able to implement rewards, provide leadership and performance management are all concepts the Enron was unable to engage. Back in July 2003, Enron was granted time to file reorganization. When all is completed, the creditors will see how much they can recover from the losses. At that time, Enron has about $5 Billion in cash on hand, and when all assets and stocks are liquidated, they should be able to distribute anywhere from $10 to $20 Billion to the creditors. Enron has spent more than half a billion dollars on bankruptcy lawyers and accountants so far, and the bills are still pouring in as of today.