Case Study

THE BODY SHOP INTERNATIONAL PLC2001: AN INTRODUCTION TO FINANCIAL molding question 1. The Body Shop International used to be superstar of the most successful companies in the late 1990s. til now so, it has become more difficult to stay in arrant(a) naked environments with the entry of new competitors which led to revenue grew by 13 percentage and the pooh-pooh in pretax profit of 21 percent was observed in 2001. As it turned disclose later the main defect was that there was lack of forecasting. We as a consulting group are freeing to analyze corporation and calculate three old age forecast victimization companys financial statements from the year 1999-2001. Our case cultivation assumptions are going to be ground on the interest main objectives, set by Patrick Gournay: 1. addition investments in stores 2.Reduce broth and product costs We are going to use percent-of- primitive gross revenue forecasting method which means calculating gross sales in 200 2 and then forecast other accounts based on the assumptions and their direct relationship with sales. We used this type of forecasting due to the lack of information (there are only 3 recollective time of available data and this lack of information). Information on the calculations for from each one account individually is to be given up further in the next section.

SALES: For this number we took honourable a diachronic average of the three years wrenchth. The primer why we took the historical averages for the majority of accounts is that we cannot predict the factors that are potential to be in the future day. Therefore, the average of various figures is the ruff way to conne ct future factors with the past. The growth ! rate of sales in 1990 was 20%. However in 2000 the sales grew by 8.7%. As it was mentioned before this impulsion is largely due to increase competition. In 2001 sales grew by 13.3. Therefore, it is highly unlikely to take that in 2002 growth allow still stay at 20% as the square has already reached its maturity manikin in the business cycle. The sales are expected to grow at 11 percent in 2002, 2003, 2004....If you want to farm a full essay, nine it on our website: OrderEssay.net

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