Body Shop International Plc 2001 Case Study Essay

Words: 1667
Pages: 7
Open Document
The Body Shop International PLC 2001: An Introduction to Financial Modeling
The following graph presents the forecast for the Body Shop’s income statement and balance sheet in 2002 to 2004:

How did you derive your forecast? Why did you choose the “base case” assumptions that you did?
The forecast takes into considerations the stated business objectives of the Body Shop as well as trends or patterns in the historical financial statement in exhibit 8. Further information on the calculations and assumptions underlying the forecast is to be explained for each account individually in the following section:
Assumptions related to the sales growth, expenses and earnings parameters
Sales growth: Given the Body Shop’s growth level of 20% in …show more content…
Cash decreased by 43.5 % in 2000 and 28.6 % in 2001. It is assumed that the following years cash stock will continue to decrease by 28.6 % per year.
Accounts receivable: The accounts receivable/Sales ratio is assumed to be 8.8 % in 2002 to 2004 which is the weighted average of the accounts receivable/sales ratios in 1999, 2000 and 2001.
Inventories: Assumed to increase by 10 % per year due to the Body Shop’s stated business strategy.
Other current assets: Assumed to stay at similar level as the previous year’s percent-of-sales ratio. The percent-of-sales ratio is 4.5 % which is the weighted average of the previous years.
Net fixed assets: Assumed to increase due to the Body Shop’s business strategy that intends to increase the investment in stores. It is assumed that the body shop will continue to expand its numbers of stores each year, which in this forecast will translate into an annual increase of 5 % increase in the value of net fixed assets.
Other assets: Assumed to keep at the current percent-of-sales level from 2001 equal to 1.8 %.
Accounts payable: Accounts payable has been significantly reduced in previous years, however it is assumed that it will stay at the current percent-of-sales level from 2001 equal to 2.9 %
Taxes payable: Assumed to stay at the current percent-of-sales level from 2001 equal to 1.9 %.
Accruals: Forecasted to be equal to 3.8 % of sales each year which is the weighted average of the
Show More

Related Documents: Body Shop International Plc 2001 Case Study Essay

Essay on

International Journal of Retail & Distribution Management Building brand webs: Customer relationship management through the Tesco Clubcard loyalty scheme Jennifer Rowley Article information: Downloaded by Newcastle University At 07:53 22 November 2014 (PT) To cite this document: Jennifer Rowley, (2005),"Building brand webs", International Journal of Retail & Distribution Management, Vol. 33 Iss 3 pp. 194 - 206 Permanent link to this document: http://dx.doi.org/10.1108/09590550510588361 Downloaded…

Words 7502 - Pages 31

Thorntons Case Study.Doc Essay

CASE STUDY THORNTONS PLC Introduction In September 2003 Thorntons, the Uk’s largest manufacturer and retailer of specialist chocolates, completed a three-year planning period aimed at achieving a turnaround in the company’s performance. While company turnover had been increased to £167m (= €250m) providing Thorntons with an 8 percent share of its core market, boxed chocolates, profit after tax had declined to the lowest level for seven years (Exhibit 1). During that time Thorntons had…

Words 5955 - Pages 24

Clarification And Internationalization Of Retailing

utilized has declined by around 7 every penny in the course of the most recent five years in France and the UK. In Britain, despite the fact that rebate has not arrived at the profundity and broadness it has on the Continent, retail benefit is in any case underweight from expanding overcapacity. The majority of the essential markers are indicating down: genuine deals every square foot is down 3 every penny every year, genuine horrible edges are hence down as well. Just gainfulness picks up in other…

Words 3239 - Pages 13

Essay business strategy

Employees : 155,000 (2013) Divisions : Barclaycard, Barclays Investment Bank and Barclays Wean Subsidiaries : Absa Group Barclays Bank PLC Website : www.Barclays.com Mission of Barclays bank According to Fifield (1998), Mission is an overall appearance of the general purpose of an organisation which is more simply a broad explanation of the business…

Words 8971 - Pages 36

Essay about Financial System and Auditing

Income Statement (The profit and loss account) The profit and loss account shows the income that a firm has earned during a period of time. When we deduct appropriate expenses, either profit or loss for the period can be identified. Pizzey.A, (2001), concluded that financial reporting standard requires that the company’s turnover , profit and capital employed should be analyzed to the various segments of the business so that users of the financial statements can see the profitability of the…

Words 6188 - Pages 25

Strategic & Policy Issues: Siemens AG Essay

EMGT 520 Portland State University Portland, Oregon Dundar F. Kocaoglu Strategic & Policy Issues: Siemens AG By Group 5: Irfan Khawaja Piyaporn Limkatanyoo Andrey Nikolayev Kevin Oursler Narit Puttaraksar Mathias Sunardi Strategic & Policy Issues: Siemens AG Table of Contents 1. 2. 3. 4. 5. 6. 7. 8. 9. Executive Summary / Abstract Introduction Company History Company Structure Siemens Strategies Overview 5.1. Research & Development Strategies 5.1.1. Current Status of R&D 5.1.2. R&D Strategies…

Words 7733 - Pages 31

Managing Information Technology (7th Edition) Essay

CONTENTS: CASE STUDIES CASE STUDY 1 Midsouth Chamber of Commerce (A): The Role of the Operating Manager in Information Systems CASE STUDY I-1 IMT Custom Machine Company, Inc.: Selection of an Information Technology Platform CASE STUDY I-2 VoIP2.biz, Inc.: Deciding on the Next Steps for a VoIP Supplier CASE STUDY I-3 The VoIP Adoption at Butler University CASE STUDY I-4 Supporting Mobile Health Clinics: The Children’s Health Fund of New York City CASE STUDY I-5 Data…

Words 239873 - Pages 960