... fresh entrants into the field i.e. more competition. This contributed to a reduction in Enron's business margins no mater however efficient Enron's trades were. Declining returns meant its trading margins collapsed and therefore sales growth did not translate into higher profits. This meant that Enron was not as profitable when actually trading specific gas and electricity products. As the asset based markets declined Enron moved to function primarily as a "middleman," buying and selling energy contracts between suppliers and companies that delivered this energy to consumers. It also decided to branch out into water supply and technology networking brokerage i.e. internet band width brokering. This meant that Enron had very few business assets and had to trade upon trust. The decline in Enron's profits led to its managers adopting special techniques some of them questionable to boost profits in their published accounts. This was done to support Enron's previous track record ...

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