Macroeconomics is a branch of economics that deals with the trend of the whole economy. It includes microeconomics were the factors affecting both situations intertwine and affect each other. Actually, microeconomics has to do with decisions and factors that affect small firms and companies. Macroeconomics involves study of factors such as inflation, level of employment, price levels, gross domestic profits and amounts of goods and services produced usually of a larger area like big firm or even countries or nations.
There are goals that ought to be met as a result of microeconomics. It is aimed at good full time employment, price stability and economic growth. It attempts to know the causes of economic down falls, the consequences and come up with possible solutions.
Impact of inflation variable to the economy
Inflation simply refers to the loss of the value of a currency. Implying one having a lot of money that can purchase very few goods or services. This automatically causes people to reorganise their budgeting in order to suit the amount of cash that they have meaning they are not able to acquire adequate goods and serves needed. This shows that their living standards will automatically go down leading to a poor economy. Inflation actually lowers the strength of a currency and the strength of the currency dictates the economy of a country or the people using the currency. In this case the firms owning the apartments would suffer lack of clients due to very high prices that most people cannot afford. (Amedeo, 2006)
Impact of the unemployment variable towards the economy.
Unemployment is always a sad story for any economy. It intensively affects the live of the unemployed individual and extends to the family then to the entire society. The unemployed people are always obliged to borrow from others hence affecting other people’s economies also. (Jones 2008) For the countries where the government has to pay the benefits of the unemployed, an extra tax is added to the taxpayers. And the more one earns the higher the tax rates. The firms in question would be highly affected negatively if there were high rate of unemployment in their towns due to lack of good clients and high taxation rates.
Gross Domestic Profit impact on the economy
This is the amount of the product produced by the people and is used to regulate and check on the inflation rate in an area. It is also the main determinant of the economy of the people. Usually GDP is checked out yearly and is also used to compare the economies of different areas. High rate of increase in GDP indicates potentials of inflation while slow rate of GDP growth implies unemployment variables. The investors must be very keen of this figure since it gives them a picture of the economy so as to make the right decisions for their investments. Private consumers, government spending, businesses spending and total exports all account for the final GDP, which affects all the parties at large.
All in all the profitability of the premises will largely be affected by all the above factors and therefore, the investors should be very keen on there variance and take appropriate steps to avoid loss.
Forecasting future profits
To check on the growth of a firm several of them that offer same services are put into comparison. Using simple forecasting and valuation analysis of the financial statement, where the information on the sheet is directly used to draw conclusion on the future progress of the firms, Rolling hills apartments, which have the highest profit margin of 199,944, is expected to keep up the same rate though with chances of same loss margin. Wild wood apartments are second in the amounts o profit margin of 174,008 hence it is likely to hold the same position in the future and River bend apartments will have the least profit in future as predicted by their least profit/loss margins of 113,886 in the revenue sheet provided.
The simple forecasting is not that accurate but it provides a ground for other forms of forecasting.