Why does Enron have positive OPSTM after it was diagnosed with The EPS SyndromeTM?
There are two reasons why Enron and other companies may indicate positive quarters of “OPS” after they have been diagnosed with “The EPS Syndrome.” First, it is extremely likely that the management of a company with negative “OPS” is fully aware of it and is probably managing the company in a crisis mode. This would be the equivalent of a person having a lot of bills with no money in the checking account. The natural reaction is to cut costs, reduce debt and sell assets. All of these actions or reactions generate positive “OPS.” Secondly, positive “OPS” following “The EPS Syndrome” diagnosis generally indicates that management is at least aware of the problem and is attempting to do something about it.
