Furniture store Analysis
Furniture Store Analysis
Guillermo’s furniture located in Sonara, Mexico is facing major issues and problems, the decision and choices he makes from now will either make or break his company. Competing with a high-end top of the line technology operated model furniture production Guillermo’s furniture store will not be able to compete with and will not last long in the business. Guillermo will need to determine another resolution to stay up with the rivalry if he want’s to stay open. This essay will discuss the finance concept in efforts to keep Guillermo’s furniture store in business.
There are many problems that need to be resolved at ...view middle of the document...
In order for investors to be interested in a business venture, the company’s financial statement must show a positive cash flow and demonstrate enough assets in order to help creditors loan money to the business and investors.
Guillermo should merge with the distribution channel; this will give him an advantage to cut his labor cost by utilizing the high-tech robotic system. Guillermo will have to execute a sensitivity analysis to fully understand if he should consider moving forward with the change. This analysis will help model the difference evaluation looking at cost structure, expenses and finances providing an outcome that will show the most important to least significant data that will become accurate and representative
Reducing the Risk
Environmental risk can hurt the business, it is important to have an environmental audit complete on a consist basis to ensure no problems will occur in the future that can potentially hurt the business profits and put a halt for the company from growing. Another method to be understood is the discount flow method; this can help minimize the risk associated with the different options. This method will help obtain the discount rate risk free of interest that investors...