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Guillermo Furniture Store Concepts Paper

Guillermo Furniture Store Concepts Paper

The “Guillermo Furniture Store” is found in Sonora, in which production and manufacture of furniture forms the basis of the business endeavors. The major setback within the jurisdiction of the operations of the store is competition, which stands out to diminish the monopoly of the store in the established market. For the viability if the financial stability within the store, there is need for evaluation of the processes and recommendation of possible changes that are geared towards responding to the challenges of the globally competitive world. In response to this challenge, the store has made an enormous move to improve performance through increasing the supply of its major product and outsourcing for low labor prospect zones (Gómez-Peña, 2000). This is geared towards maintaining consistent supply and reducing the cost of production respectively, while the implications of the financial concepts of the store form the essence of this paper.

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 Financial concepts of Guillermo Furniture Store Concepts Paper

The first financial concept evident in the “Guillermo Furniture Store Concepts Paper” is the flexibility in budget. This is a concept geared towards elucidating the validity of adjusting the budget to render an increased volume of production. This concept has been applicable in the paper as it explains the incrased production thorough increasing the inputs to include a platform for expansion of the supply. Such an adjustable budget allows necessary corrections to be made in relation to resource allocation, which culminates in increased production since the volume of input is proportional to the volume of output (Means, 2000).

The other financial concept evident in the case study is the production datum, which is a documentation of the stock analysis reports. This financial concept is applicable in the scenario of the Guillermo Furniture Store in that it helps in inventory assessment through relaying accuracy in the plant capacity. Moreover, the concept is fit for assessment of both the direct costs and the production capabilities. This is an assessment of the power of input verses the capabilities of output for every increased margin of increased cost of production. In responding to the profitability, the production cost has been reduced through sourcing for low labor prospects (Means, 2000).

In the assets and liabilities records, the concepts of accounts payable are evident as part of the financial concepts within the jurisdiction of the “Guillermo Furniture Store Concepts Paper”. These are found in the balance sheet records, where they elucidate the viability of performance of the store in terms of its resources verses the liabilities (Gómez-Peña, 2000). The records cover the expendiitures of the store as liabilities, while the income generated are termed as the assets. For instance, the accounts payable and taxes are termed as the liabilities to the store while the accounts receivable are the assets. These evaluations of assets verses liabilities are useful t to the evident scenario as they help to fix the net profits verses the retained earnings within the store. Moreover, they are the source of evaluation of deviations from the normal in terms of performance of the store (Means, 2000).


The financial concepts in the “Guillermo Furniture Store Concepts Paper” are evidently the assessment tools for responding to the anomalies within the store. This is from the fact that the concepts give the platform for judgment in terms of the liabilities verses the assets; the cost of production verses the net profit and the overview of performance. The financial concepts are also a source of recommendation of actions that are geared towards responding to adverse conditions. For instance, in responding to the constraints of the global competition, the store had the jurisdiction of increasing the supply as a form of responding to the increase in demand and lowering the cost of production through sourcing for low labor prospects (Gómez-Peña, 2000). These responses are majorly aided by the prescriptions from the financial concepts.

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