The Body Shop

THE BODY SHOP PRO FORMA FORECAST REPORT 1) sensual type ASSUMPTIONS (SEE APPENDIX 1) The model is built use a compounding of the percent of sales approach and t-account forecasting. Apart from cash, completely accredited assets and current liabilities be forecast as a parting of sales. It is assumed that in the long run, all the rich assets of the flying leave be related to sales. Nevertheless, other accounts such(prenominal) as sh atomic number 18holders equity and interlocking fixed assets are derived using t-accounting. They are forecast to change by a share from the foregoing old age. Sales: Sales are rate to grow at a constant rate of 11% during the forecasting period. This issue rate is based upon the average one-year maturement range from 1999 to 2001. Given the corporation is now in its maturity phase, it is incredible that it will be able to hit the 20% increment that was achieved in the early 1990s. However, with change magnituded investing i n net fixed assets over the forecasting period, the 11% sales growth should be achievable in the future. COGS: amongst 1999 and 2001, on that point has been a downward trend in COGS. The model predicts that this trend will continue at the like rate resulting in figures of 38.3%, 37.2% and 36.1% in the next three years. These meter are derived using the shape y=-1.1x+42.

7, which is the equation of the trend-line over the last three years as shown in supplement 2. The falling figure for COGS is agreeable with managements lust to reduce product be in the future. Operating Expenses: oer the last three years, there has been a clear upward(a) trend in operate expenses. However, give n managements commitment to improve the soc! ial clubs practicable efficiency, the model projects that operational expenses will barely slightly increase to 53% in 2002. This figure is expected to decrease to 51% and 49% in 2003 and 2004 as the benefits of change operational efficiencies are realised. Exceptional Costs: The model forecasts that the company will devour significant...If you want to get a profuse essay, order it on our website: OrderEssay.net

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