Use the following information (assumptions) to provide forecasts for Cantel Medi

Question

Use the following information (assumptions) to provide forecasts for Cantel Medical (CMN) in 12-16.

Assume an asset turnover ratio of 0.92 in 2009 that will grow by 0.02 turns per year from 2010-2014. Sales are forecast to grow by 6.6% in 2010, grow by 5.8% in 2011, 8% in 2012, 9% in 2013, and then level at 10% in 2014 forward. Further, assume the forecast current ratio 2.3 in 2010, 2.4 in 2011 and 2.5 from 2012 onward. Non-Current Assets are forecast to be 67% of total assets in 2010, 66% in 2011 and then 65% thereafter. The 2010 gross profit margin is forecast at 38.8% and is forecast to increase by a half percentage point per year until it reaches 40.8%. Assume net profit margin in 2009 is 6.0% and that it is forecast to increase by 0.3 percentage points per year until it levels out in 2014 at 7.5%. Finally, Cantel Medical initiated a dividend policy of $0.05 (5 cents) per share during the 4th quarter of the 2009 fiscal year. Quarterly dividends are forecast at $0.05 during the 2010 fiscal year and then $0.06 in 2011, $0.07 in 2012, $0.08 in 2013 where it is expected to remain for the next 7 years.

12. Compute the forecast total assets in 2011 for CMN.

13. Compute the forecast cost of goods sold in 2010.

14. Compute Total Shareholder Equity for the 2011 fiscal year end. (5 pts)

15. Compute the forecast total non-current liabilities for the 2010 fiscal year end. (5 pts)

16. Assume that inventory turnover for the 2009 fiscal year was 5.50 turns and that forecasts assume an increase of .25 turns for each of the next 5 years. Compute the forecast inventory for the 2011 balance sheet.

Explanation / Answer

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