The Body Shop

Case 8 Report

The embody Shop International PLC 2001:
An world to Financial Modeling

Introduction
In the archeozoic mid 90s, the ontogenesis of Body Shop´s revenue was at least(prenominal) 20% each twelvemonth. But by the late 1990s, the revenue growth fell to 8%. Body Shop was competent to grow at a fast pace early in the decade because of the lack of competition. However by the finale of the decade, the competition grew fierce. Another reason for the slow growth in the late 90s was the over expansion in the previous years. In this report, we ar going to forecast Body Shop´s Financial Statement for the conterminous trinity years (from 2001) and follow the new implemented strategy of 2001, which atomic number 18: starting linely, to enhance Brand Name & increase investment, secondly, to accrue the cost and make the company more efficient, and finally to fortify the stakeholder culture. Our forecasting will mainly focal point on the first two elements.
Basic Assumption
This paper forecasts the earnings and financial adopt of Body Shop over the next three years, by using historical sales information and other invoice ratios. Due to insufficient information, this forecast will mainly focus on relationships between sales and accounting ratio.



Our main assumptions are:
* Sales: we are assuming that the sales will film a stable growth rate of 10% for the next three years this 10% growth is based on the past three years average growth rate, from year 1999-2001.
* Cost of Goods Sales: The average COGS ratio of 1999-2001 is about 40%; it is sham that it will maintain the same amount in the forecast. This assumption is based on historical information masking that COGS has reach to a certain minimum point.
* Operating Expenses: Is assumed to decrease. However, according to past information, operating expenses is increasing the same as sales.
* Interest rate: Interest rate is assumed to be 6% of long term debt.
* taxation rate: Tax rate is assumed to average around 2% of the sales.
* Ordinary...If you indirect request to get a full essay, order it on our website: Ordercustompaper.com



If you want to get a full essay, wisit our page: write my paper