The Body Shop Plc 2001:

Basic Forecasting Results for 2002

Input Data
374,100 13%
SALES 422,733
COGS/SALES 0.38
OPERATING EXPENSES/SALES 0.50
INTEREST RATE 0.06
TAX RATE 0.30
DIVIDENDS (Thousand pounds) 10,900
CURR. ASSETS/SALES 0.32
CURR. LIABS./SALES 0.28
FIXED ASSETS 110,600
STARTING EQUITY 121,600

INCOME STATEMENT 2002

SALES 422,733
COGS 160,639
OPERATING EXPENSES 211,367
INTEREST EXPENSE (INCOME) (1,171)
PROFIT BEFORE TAX 51,899
TAX 15,570
PROFIT AFTER TAX 36,329
DIVIDENDS 10,900
EARNINGS RETAINED 25,429

BALANCE SHEET 2002

CURRENT ASSETS 135,275

FIXED ASSETS 110,600
TOTAL ASSETS 245,875

CURRENT LIABILITIES 118,365

DEBT (19,520)
EQUITY 147,029
TOTAL LIAB. & NET WORTH 245,875
The Body Shop Plc 2001: 13%
Finished Results for 2002, Reflecting Excess Cash

Input Data 374.1

13%
SALES 441,438 441.438
COGS/SALES 0.38
OPERATING EXPENSES/SALES 0.50 COGS/SALES
INTEREST RATE 0.06
TAX RATE 0.30
DIVIDENDS (Thousand pounds) 10,900
CURR. ASSETS/SALES 0.32
CURR. LIABS./SALES 0.28
FIXED ASSETS 110,600
STARTING EQUITY 121,600

INCOME STATEMENT 2002

SALES 441,438
COGS 211,890
OPERATING EXPENSES 220,719
INTEREST EXPENSE (INCOME) (1,171)
PROFIT BEFORE TAX 51,899
TAX 15,570
PROFIT AFTER TAX 36,329
DIVIDENDS 10,900
EARNINGS RETAINED 25,429

BALANCE SHEET 2002

EXCESS CASH 19,520

CURRENT ASSETS 135,275
FIXED ASSETS 110,600
TOTAL ASSETS 265,395

CURRENT LIABILITIES 118,365

DEBT 0
EQUITY 147,029
TOTAL LIAB. & NET WORTH 265,395

TRIAL ASSETS 245,875

TRIAL LIABILITIES AND EQUITY 265,395
PLUG: DEBT (EXCESS CASH) (19,520)
Sensitivity Analysis Sensitivity Analysis
Debt and Excess Cash Debt and Excess Cash
By COGS/SALES By Sales Growth

COGS/SALES DEBT Ex. CASH Sales growth DEBT Ex. CASH

0 19,520 0 19,520
0.35 0 19,520 12% 0 19,520
0.38 0 19,520 13% 0 19,520
0.40 0 19,520 14% 0 19,520
0.42 0 19,520 15% 0 19,520
0.44 0 19,520 16% 0 19,520
0.45 0 19,520 17% 0 19,520
0.48 0 19,520 18% 0 19,520
The Body Shop International Plc 2001:
Hypothetical Three-Year Forecast,
Drawing on Case Exhibit 8

Fiscal Year Ended February 28

Income Statement 1999 2000 2001
Turnover 303.7 100.0% 330.1 100.0% 374.1
Cost of sales 127.7 42.0% 130.9 39.7% 149.0
Gross profit 176.0 58.0% 199.2 60.3% 225.1
Operating expenses
–excluding exceptional 151.4 49.9% 166.2 50.3% 195.7
–exceptional costs 4.5 1.5% 0.0 0.0% 11.2
Restructuring costs 16.6 5.5% 2.7 0.8% 1.0
Net interest expense 0.1 0.0% 1.5 0.5% 4.4
Profit before tax (PBT) 3.4 1.1% 28.8 8.7% 12.8
Tax expense 8.0 2.6% 10.4 3.2% 3.5
Profit/(loss) after tax (4.6) -1.5% 18.4 5.6% 9.3

Ordinary dividends 10.9 3.6% 10.9 3.3% 10.9

Profit/(loss) retained (15.5) -5.1% 7.5 2.3% (1.6)

Balance Sheet
Cash 34.0 11.2% 19.2 5.8% 13.7
Accounts receivable 27.8 9.2% 30.3 9.2% 30.3
Inventories 38.6 12.7% 44.7 13.5% 51.3
Other current assets 12.5 4.1% 15.6 4.7% 17.5
Net fixed assets 87.8 28.9% 104.7 31.7% 110.6
Other assets 0.0 0.0% 6.0 1.8% 6.7
Total assets 200.7 66.1% 220.5 66.8% 230.1

Accounts payable 13.0 4.3% 20.5 6.2% 10.7

Taxes payable 11.3 3.7% 11.7 3.5% 7.1
Accruals 10.8 3.6% 15.6 4.7% 11.5
Overdraft 0.0 0.0% 0.3 0.1% 0.7
Other current liabilities 21.6 7.1% 13.3 4.0% 16.9
Long-term liabilities 28.0 9.2% 36.7 11.1% 61.2
Other liabilities 1.7 0.6% 1.0 0.3% 0.4
Shareholders' equity 114.3 37.6% 121.4 36.8% 121.6
Total liabs. & equity 200.7 66.1% 220.5 66.8% 230.1
28 Assumptions
2001 2002–2004 2002
100.0% Growth 13.0% 422.733
39.8% % sales 40.5% 171.251
60.2% Calculated 251.482

52.3% % sales 50.8% 214.907

3.0% fixed 0.0% 0.000
0.3% fixed 0.0% 0.000
1.2% % of debt (LT, overd 6.0% 2.863
3.4% Calculated 33.711
0.9% % of PBT 30.0% 10.113
2.5% Calculated 23.598

2.9% Constant 10.9 10.900

-0.4% Calculated 12.698

3.7% Plug, min. 10.00 13.477

8.1% % sales 8.8% 37.246
13.7% % sales 13.3% 56.314
4.7% % sales 4.5% 19.051
29.6% % sales 30.1% 127.091
1.8% fixed 0.0% 6.700
61.5% 259.878

2.9% % sales 4.5% 18.813

1.9% fixed 0.0% 7.100
3.1% % sales 3.8% 16.002
0.2% Plug 0.000
4.5% % sales 5.2% 22.065
16.4% Fixed 0.0% 61.200
0.1% Fixed 0.0% 0.400
32.5% Calculated 134.298
61.5% 259.9
good
Trial assets 246.4
Trial liabs. & equity 259.9
Trial plug (13.5)
Min. cash balance 10.0
Plug (3.5)
Forecast
2003 2004
477.688 539.788
193.514 218.671
284.174 321.117

242.845 274.414
0.000 0.000
0.000 0.000
3.348 3.812
37.981 42.890
11.394 12.867
26.587 30.023

10.900 10.900
15.687 19.123

10.000 10.000
42.088 47.559
63.635 71.907
21.527 24.326
143.612 162.282
6.700 6.700
287.562 322.774

21.259 24.022
7.100 7.100
18.082 20.433
4.603 12.336
24.934 28.175
61.200 61.200
0.400 0.400
149.985 169.108
287.56 322.8
good good
277.6 312.8
283.0 310.4
(5.4) 2.3
10.0 10.0
4.6 12.3
The Body Shop International Plc 2001:
Hypothetical Three-Year Forecast,
Drawing on Case Exhibit 8

Fiscal Year Ended February 28

Income Statement 1999 2000 2001
Turnover 303.7 100.0% 330.1 100.0% 374.1
Cost of sales 127.7 42.0% 130.9 39.7% 149.0
Gross profit 176.0 58.0% 199.2 60.3% 225.1
Operating expenses
–excluding exceptional 151.4 49.9% 166.2 50.3% 195.7
–exceptional costs 4.5 1.5% 0.0 0.0% 11.2
Restructuring costs 16.6 5.5% 2.7 0.8% 1.0
Net interest expense 0.1 0.0% 1.5 0.5% 4.4
Profit before tax (PBT) 3.4 1.1% 28.8 8.7% 12.8
Tax expense 8.0 2.6% 10.4 3.2% 3.5
Profit/(loss) after tax (4.6) -1.5% 18.4 5.6% 9.3

Ordinary dividends 10.9 3.6% 10.9 3.3% 10.9

Profit/(loss) retained (15.5) -5.1% 7.5 2.3% (1.6)

Balance Sheet
Cash 34.0 11.2% 19.2 5.8% 13.7
Accounts receivable 27.8 9.2% 30.3 9.2% 30.3
Inventories 38.6 12.7% 44.7 13.5% 51.3
Other current assets 12.5 4.1% 15.6 4.7% 17.5
Net fixed assets 87.8 28.9% 104.7 31.7% 110.6
Other assets 0.0 0.0% 6.0 1.8% 6.7
Total assets 200.7 66.1% 220.5 66.8% 230.1

Accounts payable 13.0 4.3% 20.5 6.2% 10.7

Taxes payable 11.3 3.7% 11.7 3.5% 7.1
Accruals 10.8 3.6% 15.6 4.7% 11.5
Overdraft 0.0 0.0% 0.3 0.1% 0.7
Other current liabilities 21.6 7.1% 13.3 4.0% 16.9
Long-term liabilities 28.0 9.2% 36.7 11.1% 61.2
Other liabilities 1.7 0.6% 1.0 0.3% 0.4
Shareholders' equity 114.3 37.6% 121.4 36.8% 121.6
Total liabs. & equity 200.7 66.1% 220.5 66.8% 230.1
28 Assumptions
2001 2002–2004 2002
100.0% Growth 31.4% 491.608
39.8% % sales 38.0% 186.811
60.2% Calculated 304.797

52.3% % sales 50.8% 249.737

3.0% fixed 0.0% 0.000
0.3% fixed 0.0% 0.000
1.2% % of debt (LT, overd 5.0% 2.553
3.4% Calculated 52.507
0.9% % of PBT 30.0% 15.752
2.5% Calculated 36.755

2.9% Constant 10.9 10.900

-0.4% Calculated 25.855

3.7% Plug, min. 10.00 10.13

8.1% % sales 8.0% 39.329
13.7% % sales 13.0% 63.909
4.7% % sales 4.0% 19.664
29.6% % sales 29.0% 142.566
1.8% fixed 0.0% 6.700
61.5% 282.302

2.9% % sales 4.5% 21.878

1.9% fixed 0.0% 7.100
3.1% % sales 3.8% 18.609
0.2% Plug 0.000
4.5% % sales 5.2% 25.660
16.4% Fixed 0.0% 61.200
0.1% Fixed 0.0% 0.400
32.5% Calculated 147.455
61.5% 282.3
good
Trial assets 272.2
Trial liabs. & equity 282.3
Trial plug (10.1)
Min. cash balance 10.0
Plug (0.1)
Forecast
2003 2004
646.027 848.950 20.00%
245.490 322.601 38.00%
400.537 526.349

328.182 431.266 52.00%

0.000 0.000
0.000 0.000
3.830 5.348 5.00%
68.525 89.734
20.557 26.920
47.967 62.814

10.900 10.900
37.067 51.914

10.000 10.000
51.682 67.916 8.00%
83.983 110.363 13.00%
25.841 33.958 4.00%
187.348 246.195 29.00%
6.700 6.700
365.554 475.133

28.750 37.781 4.00%

7.100 7.100
24.454 32.136 3.50%
25.408 55.768
33.720 44.312 5.20%
61.200 61.200
0.400 0.400
184.522 236.436
365.55 475.1
good good
355.6 465.1
340.1 419.4
15.4 45.8
10.0 10.0
25.4 55.8