A financial analyst has developed the following forecasts for the key financial metrics of financial statements for valuation purpose. Her points of reference in developing these forecasts were the reported numbers from financial statements in the last two years, 2019 and 2020.

REQUIRED

Identify and explain two possible assumptions for each of the above key financial metrics that the analyst had in mind while developing the forecasts.

\begin{tabular}{lrr|rrr} \hline & \multicolumn{2}{c|}{ Actual } & \multicolumn{3}{c}{ Forecasts } \\ & 2019 & 2020 & 2021 & 2022 & 2023 \\ \hline Sales growth & 5% & 5.5% & 4% & 3% & 2% \\ NOPAT margin & 2.5% & 3% & 2.5% & 2% & 2% \\ Opening working capital to sales & 10% & 11% & 13% & 10% & 10% \\ Opening net long-term assets to sales & 75% & 77% & 73% & 70% & 67% \\ After tax cost of debt & 5% & 5% & 5.25% & 5.5% & 6% \\ Opening debt to capital ratio & 15% & 16% & 18% & 20% & 23% \\ \hline \end{tabular}