Ford Motors Company
Ford motors company is one of the entities in the automobile industry that is intending to introduce new offerings for it to remain competitive in the market. This company is likely to incorporate new technology in the new release for it to sell in the market. A forecast of the Ford Company in the next 5 years shows that this firm will have attained some significant level of innovation. This will in turn lead to increased profitability. In the next 10 years, other firms, its competitors will have devised ways of beating it, and this may lead to a reduction in its profits. The reduction in profits can be explained using the law of diminishing marginal utility, and this is because people will get used to the new offerings up to a time when the utility that they derive from the offering wanes, thus making them either reduce their demand or shift to Ford’s competitors.
Moreover, it is also predicted that the firm will be affected by inflation in the near future. This claim is based on its past trend as captured between 1964 and 2019, which saw the rise in the prices of the commodity ten times, and this is likely to recur to the worst levels. Conversely, in addition to inflation, the other thing that can be used in forecasting the position of Ford Motors in the future is the time value of money, which is directly affected by inflation. In this case, the prices of the new offerings will increase at a fluctuating rate depending on the state of the economy. This will definitely affect the financial health of the company negatively as high prices will lead to a decline in demand. However, this does not mean that the firm may close its operations any soon. The future health of the firm can accurately be predicted using Altman’s Z-Score model.