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Guillermo Furniture Store Analysis - Research Paper Example
Finance & Accounting
Pages 6 (1506 words)
Guillermo Furniture Store Analysis: Alternatives Available to Guillermo Course Name Introduction Guillermo Furniture Store is a sole proprietorship that is owned and operated by Guillermo Navallez. The firm has been operating as a profitable business for a number of years…
As a result of this, Guillermo realizes that he needs to act quickly or go out of business. The benefits of operating as a sole proprietorship include the fact that Guillermo is able to make decisions without consulting anyone. With this in mind, Guillermo has decided not to merge with other organizations or even to acquire another organization. This led to the consideration of three options – continue as usual; purchase a hi-tech machine; and operate as a broker. However, before any decision can be taken, an analysis of the three options is required. Continuing as usual does not require Guillermo to do anything but to do business in the same manner as before. It is best that Guillermo makes some changes to his current operations. If sales and profits continue to fall then the end result is that the firm would have cease operations. However, with Guillermo’s reluctance to go the way of merger or acquisition closure of the business may be inevitable if the other options are not feasible. Purchasing a hi-tech machine is a very costly option as it requires an outlay of capital. Therefore, Guillermo’s ability to obtain funds as well as the cost of capital has to be a prime consideration. However, there are benefits that can be achieved from going this route. In order to break even, a certain level of sales would have to be achieved. ...
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