Guillermo Furniture Store Concepts

Guillermo Furniture Store Concepts Paper

Finance is primarily concerned with determining value and how to make the best decisions. There are three main areas of finance: corporate financial management, investments, and financial markets and intermediaries (University of Phoenix). Corporate financial management decisions include three categories. Investment decisions are based on the left side or asset side. What investments can be made are based on this side. Financing decisions are based on the liabilities and stockholders’ equity (right) side. Based on the information from this side of the balance sheet the financial needs to make the investments decided on will be determined.

The Behavioral Principle simple means searching to find out what others are doing and have done in the past and then making a decision that best suits the company. This is what Guillermo Navallez did for Guillermo Furniture.

Principle of Value Ideas is being used. Guillermo also has a patented process for creating a coating for his furniture. In producing this product, the process first creates a common flame-retardant, and upon further processing, the coating is complete and stain resistant. There is market for the flame retardant, but not as much of a market for the finished coating. There is another product that Guillermo could buy to apply to his furniture as well that would add the same amount of value for the furniture. With his patented process he stands a chance of increasing his financial level (University of Phoenix).

The Options Principle means a person has an option which is also a right without obligation to do something. Guillermo has options for his business, they include joining larger organizations, investing in high tech machines to cut down on labor costs, and finally becoming a representative for North America and move from manufacturing to distribution.

References

Retrieved October 2, 2011 from University of Phoenix week one overview.