1. Describe the situation facing Mensa at the time of the case. This should include the major issues...

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1. Describe the situation facing Mensa at the time of the case. This should include the major issues facing the company and the decisions that need to be made. You are to spend no time on corporate history. You must consider the past, but your analysis and recommendations should be forward looking.
2 .List your specific recommendations for the firm in detail. Explain why each recommendation was made including the information used and the logic (or analysis) applied to reach your conclusion. As you prepare your analysis, remember that no decision is complete until the financial impact of the decisions is determined. Don't forget to use cash flow analysis and Net Present Value techniques when analyzing the four divisions within Mensa, Inc.
3 .If your recommendation(s) need to be taken in a particular sequence, be sure to indicate the proper sequence and the reasons for that sequence.
4. Discuss the events or uncertainties that are most likely to cause trouble in the implementation of your recommendations and how you would react to them if they were to occur.

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1. Describe the situation facing Mensa at the time of the case. This should include the major issues facing the company and the decisions that need to be made. You are to spend no time on corporate history. You must consider the past, but your analysis and recommendations should be forward looking. 2 .List your specific recommendations for the firm in detail. Explain why each recommendation was made including the information used and the logic (or analysis) applied to reach your conclusion. As you prepare your analysis, remember that no decision is complete until the financial impact of the decisions is determined. Don't forget to use cash flow analysis and Net Present Value techniques when analyzing the four divisions within Mensa, Inc. 3 .If your recommendation(s) need to be taken in a particular sequence, be sure to indicate the proper sequence and the reasons for that sequence. 4. Discuss the events or uncertainties that are most likely to cause trouble in the implementation of your recommendations and how you would react to them if they were to occur.

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David · Accepted Answer

Running Head: MENSA INC
PAGE  
2
Mensa Inc
Running Head: MENSA INC
Mensa Inc
Name
Institution
Situation facing Mensa at the time of the case
Major Issues
1. The debt of the firm’s is structured in a way that at least 40% of the net sale price of assets is paid to debt holders.
2. In the current 4 years, the overhead cost of the company have been about $200,000,000
At the time of the case Mensa Inc., company had invested huge amounts of capital per dollar of their sales compared to most of its competitors. This made consultants think that the company’s problem could be solved by expanding the size of the company’s operation. According to consultants, they believed that an expansion of the company’s size could increase its division sales by approximately 15% per year as well as increasing returns on the segment assets to the range from 15% and 18%. Further, the division sales were expected to increase by a margin of 15% for the proceeding decade if the company was to make the necessary investment in the business.
Secondly, Mensa had a major acquisition in the energy business through the EasyGas Energy that it had bought. The acquisition allowed the company to penetrate into a number of areas in the energy business. The company was very active in the discovery, advancement and production of oil and gas. Following its acquisition of EasyGas, Mensa had acquired working interests in both the onshore and offshore oil and gas properties in Mississippi and the Gulf of Mexico, which it had initially purchased to build a better understanding of the business. EasyGas by then was the sole distributor of natural gas to peninsular Florida and one of the only six U.S companies selected by PEMEX to buy its gas from the prime source. 
Thirdly, Mensa had entered into a joint of Suppan Energy Corp. at an approximately $400 million cost.  The acquisition enlarged the company’s established reserves of oil and gas by 50% strengthening the company’s position in domestic natural gas. The company had entered into joint ventures with Shell Oil which enabled it acquire additional offshore leases that made it participate in intensive exploration drilling activities. At that moment,

1. Describe the situation facing Mensa at the time of the case. This should include the major issues facing the company and the decisions that need to be made. You are to spend no time on corporate...

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