Recommendations The financial services sector is the one sector where Mensa, Inc. should be investing in. If they would invest, they could increase their market share and increase the growth rate in sales that is currently 15%. Mensa, Inc. should begin investing in year 6, when they have a positive cash flow and should invest $250 million to $300 million over the two year period. By increasing their assets, Mensa, Inc. would have a positive position with a strong market share. This should enable the company to have a market value that exceeds $1 billion. The energy sector should not invest in exploration or development due to the cash needed to make the venture successful. Investing in this part of the sector would mean a negative cash …show more content…
By doing so, Mensa, Inc. will have substantial cash reserves to implement the investment in other sectors. This should be accomplished as soon as possible due to the possibility of these assets depreciating in value. Once the capital has been raised, Mensa, Inc. should invest in the Florida pipeline. Timing is crucial since a delay could induce potential customers to find an alternative source of energy and thus decrease demand along with both profitability and cash flow. At the same time, Mensa, Inc. should invest in the financial services sector. By raising capital by selling both the packaging and forest production sectors, the company now has sufficient capital to become a major player in this sector with increase market share which will lead to increased profitability and cash flow.
Events or Uncertainties The aforementioned recommendations are ones with minimum risk and thus the returns while positive, will be realized over the long term. The one issue that always needs to be considered is that of future economic conditions. A serious downturn, or recession in the economy would threaten the financial sector. If such a downturn were to exist, the course of action would be for Mensa, Inc. to divert investments to the sectors of the company less influenced such as the energy sector. This sector would then support Mensa, Inc. through the economic downturn after which they can continue of the suggested action
My opponents 1st/2nd/3rd contention was that drilling in Alaska will cost billions. True, drilling in Alaska will cost billions but the positive impact on the U.S. economy far outweighs the cost. Also, the billions of dollars it will cost to drill in the ANWR will be mostly paid by companies who want to develop into the ANWR, not the U.
...(which they do not control)” (Taleb). People should become more involved with the financial process. A person should save their money for the future instead of relying on investments to pay off. When investing they should choose things that are low risk and not take a large gamble.
You have asked me to analyze your plans for future growth and recommend the best form of business organization to accommodate that growth. I have also taken into consideration you’re your two main concerns of increased liability and ability to add investment in capital assets.
There are also other structures in place to estimate the system, express community priority value, and give a way to make very strategic and realistic investments in the “years” to come.
We defined several criteria to determine our choice – return, risks and other quantitative and qualitative factors. Targeting a debt ratio of 40% will maximize the firm’s value. A higher earning’s per share and dividends per share will lead to a higher stock price in the future. Due to leveraging, return on equity is higher because debt is the major source of financing capital expenditures. To maintain the 40% debt ratio, no equity issues will be declared until 1985. DuPont will be financing the needed funds by debt. For 1986 onwards, minimum equity funds will be issued. It will be timed to take advantage of favorable market condition. The rest of the financing required will be acquired by issuing debt.
Roberts, MJ, Lassiter, JB & Nanda, R 2010, US Department of Energy & Recovery Act Funding: Bridging the “Valley of Death”, Harvard Business School, Cambridge, USA.
outlined in this report, but will need to be executed to ensure the increased profitability of
All the other aspects of this company show that even if the economic situation at this point is not that bright their sales is rising, and that all is the result of hard work within and outside the company, UPS structure and UPS management.
William Sharpe, Gordon J. Alexander, Jeffrey W Bailey. Investments. Prentice Hall; 6 edition, October 20, 1998
A 5 year strategic plan for Mensa Inc. should be dynamic and focus on ensuring that the present situation where in multiple sectors and businesses are involved. Re investing and formulating a stronger BCG matrix with divestiture from loss making units becomes extremely essential. The BCG matrix is a matrix that is used for the purpose of strategy formulation of a firm, but it is a four cell matrix.
...tner of this electricity plant. That will definitely decrease our profits and control but it will assure the constant power demand by these industries. Thus we can reduce our external threats through this step. These industrialists will also help financially in our expansion plan and give us better goodwill in the market.
One of the key areas of long-term decision-making that firms must tackle is that of investment - the need to commit funds by purchasing land, buildings, machinery, etc., in anticipation of being able to earn an income greater than the funds committed. In order to handle these decisions, firms have to make an assessment of the size of the outflows and inflows of funds, the lifespan of the investment, the degree of risk attached and the cost of obtaining funds.
Question Marks – represents low market share and high market growth, at this stage the organisation will invest an enormous
For an organisation to rise fund, they usually tend to look at the stock market and capital market to do it so. This is two markets are usually seemed similar by the investors as they both contributes to the development of an economy. But there are significant difference between them. The capital market is a market that consist of stock market as well as the bond market. As a result, the capital market provides a long-standing finance using the debt capital and the equity capital. Capital markets divided into two sectors known as primary markets and secondary markets. The primary market is where securities are issued for the first time whereas the secondary market is where securities that have been already issued are traded among investors (Difference...
... stock fluctuations. If a financial advisor cannot be afforded, it would have been in the best interest of the investor to read more on the stock market news regarding what stocks were predicted to have a profitable growth. The investor could have stayed with energy and renewables, just cold have chosen different corporations then the ones chosen.