Fin/571 Wk 1 Giullermo Simulation

Scenario: Guillermo Furniture Store Concepts
Quincy Brown
University of Phoenix
FIN/571 Corporate Finance
MBA/Oscar Lewis
Monday March 15, 2010
Week One

The curious case of Guillermo and his furniture store really seems to be a serious case of business and finance. Guillermo has been pushed away from the comfort he felt for so long and because of it; he now is forced to completely change the way he would like to run his business. Even more importantly, the way he knows best how to run the business must change. The financial side of the matter is money; the way it will be spent, but most importantly with so many changes how it will be made. How should Guillermo change his budget and what is the most relevant financial information for this situation?

      Guillermo has decisions to make for his family, his business and to keep up with the competition now suddenly world-wide. “Accountants, statisticians, and mathematicians try to express as many decision factors as feasible in quantitive terms; because this approach reduces factors they need to consider (ch. 5, Burgstar, Schatzberg).” Guillermo also has a patent for his stain resistant, non-flammable furniture coating and he started plotting immediately.
      In every field there is a fine line drawn between the practices known as ethical and those known as unethical. In many cases some people want to stay ahead of the competition, and in other cases they want to take everyone down for self (personal or corporation’s purpose) benefit. Sometimes the pressure to be successful can be hard to cope with. There are both good responsibilities like assets (cash, accounts receivable, inventory, buildings and patents); also there are liabilities (accounts payable, taxes payable, mortgage payable and unearned revenue) which can lose a business’s value and/or create a shut down. “To make good business decisions, you need to understand humans. Although there may be individual exceptions, we...