Guillermo Furniture Store Analysis

Guillermo Furniture Store Analysis
Hugo Haro
FIN 571
May 11, 2012
Jeremy Alessandro

Guillermo Furniture Store Analysis
The furniture industry can be profitable at times but also can be costly when opportunities arise and are not managed wisely. For instance, in Guillermo’s case, several opportunities have risen and his company has the opportunity to move his company in other directions, such as staying in the current furniture production but making several changes, or becoming a broker in the industry, or just sell his assets and exit the industry altogether. Guillermo can also diversify his current business with the opportunities available into a portfolio. Diversifying his current business into a well managed portfolio can dampen any swing in a particular area of the furniture industry like a sudden decrease of retardant sales but an increase in broker distributorship business.
In this report the author will consider three possible alternatives for Guillermo’s Furniture Store and make recommendations on what would be best suitable for Guillermo’s company. The Guillermo Furniture Company has been a staple in Sonora, Mexico for a long time. Guillermo’s furniture has maintained a respectable capital budget history but realizes that changes will be made to become more competitive. First he will need to improvise his capital budget, sales forecast, and analysis of his business, to include his operations and the effects of economic trends within and out of the furniture industry. For instance, housing, and consumer confidence can have a big impact in what people will buy or intend to buy some time in the near future.
Guillermo’s Capital Budget at a Glance
After further review of Guillermo’s capital, the recent economic trend has proved to be a struggle for Guillermo’s furniture business because of several factors affecting his revenue. For instance, new competitors with better technology and making furniture on demand, increased labor...