Mensa, Inc. was established in 1974 as a packaging company. In the early1980s, Mensa’s has become the largest packaging company in the world in terms of total packaging revenues. In addition, the company has been several changes in directions that diluted the impact of capital spending and effects the position of Mensa.
During the 1980s and 1990s, Mensa produced electric equipment or motor, auto parts, airplane wings, appliances, furniture, communication equipment, chemicals and consumer products to expand its business in other sectors. It also brought several regional retail chains to sell its consumer and others products but none of these businesses financially performed well that generated loss and liquidated position (Smith, 2002). The
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It resulted the largely loss of business that generated requirement of sale of assets around $6000-700 million to maintain its assets-liability ratio. Moreover, to improve the losses situation of the businesses the company should be focused on reinvestment strategy. The company was focused on reinvestment strategy and developed a reinvestment plan for the next five years to improve its assets-liability ratio (Jackson, Sawyers & Jenkins, 2008). The company was targeted to earning $600-700 million from the sale of assets or unprofitable businesses and then reinvested these finances in the promising profitable growth …show more content…
Moreover, the consults forecasted that revenue increase around 8% per year in the absent of investment for the exploration and production division. In addition, if the recommended investments were made management consults expected that revenues increase annually from the 10% to 15% range during the next 10 years (Moyer, McGuigan, Rao & Kretlow, 2011). It indicates that recommended investments would be beneficial of the company to increase its sales and to increase returns on segment assets that would reduce the negative impacts of