The Body Shop

THE BODY SHOP PRO FORMA FORECAST REPORT 1) animal type ASSUMPTIONS (SEE APPENDIX 1) The model is built apply a compounding of the percent of sales approach and t-account forecasting. Apart from cash, each(prenominal) accredited assets and current liabilities be forecast as a parting of sales. It is assumed that in the long run, all the oil-bearing assets of the flying leave be related to sales. Nevertheless, other accounts such as shargonholders equity and interlocking fixed assets are derived using t-accounting. They are forecast to change by a dowry from the foregoing old age. Sales: Sales are mensurate to grow at a constant rate of 11% during the forecasting period. This issue rate is based upon the average yearbook maturement range from 1999 to 2001. Given the corporation is now in its maturity phase, it is incredible that it will be able to make water the 20% increment that was achieved in the early 1990s. However, with outgrowthd enthronization in 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 analogous rate resulting in figures of 38.3%, 37.2% and 36.1% in the next three years. These amount 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 longing to reduce product be in the future. Operating Expenses: over the last three years, there has been a clear upward(a) trend in operate expenses. H owever, given managements commitment to impr! ove the social 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 withdraw significant...If you want to get a profuse essay, order it on our website: OrderEssay.net

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