The Body Shop International Plc 2001
The Body Shop was one of the fastest growing manufacturer- retailers in the late 1990s. However, throughout the years, they failed to maintain its brand image by becoming something of a mass-market line. Anita Roddick, the shops founder and Patrick Gournay, CEO are looking for assistance in short and long-term planning for The Body Shop. The goal is to yield practical insights while being straightforward. To get started, we assumed the growth rate for sales is 13%; the cost of goods sold percent change is 38% changes, and a 50% change for operating expenses. The amount of external financing, the variables affecting the estimates, what the best way to raise the financing, along with important ratios, the internal growth rate, the sustainable growth rate, and future recommendations will all be discussed.
External financing helps companies to be profitable and obtain growth. One way to determine if external financing is needed is to look at the pro forma balance sheet, if the trial assets are less than the trial liabilities, a company will not be in need of external financing. The opposite is also true. If the trial liabilities are less than the trial assets, than the company will be in need of external financing. While looking at the trial assets and liabilities, The Body Shop will not need external financing in 2002. The trail assets are £187 million compared to the trial liabilities which are £248 million. However in 2003 and 2004, external financing will be needed. In 2003, the trial assets are approximately £12 million greater than trial liabilities and in 2004; it is about £30 million greater. It seems The Body Shop is in greater need of external financing every year.
Another way to determine if external financing is needed is to analysis the external financing equation. Using this method, the company will need external financing for all three years. In 2002, The Body Shop will need £ 27,912 million in external financing. In 2003 and 2004, the need
External financing helps companies to be profitable and obtain growth. One way to determine if external financing is needed is to look at the pro forma balance sheet, if the trial assets are less than the trial liabilities, a company will not be in need of external financing. The opposite is also true. If the trial liabilities are less than the trial assets, than the company will be in need of external financing. While looking at the trial assets and liabilities, The Body Shop will not need external financing in 2002. The trail assets are £187 million compared to the trial liabilities which are £248 million. However in 2003 and 2004, external financing will be needed. In 2003, the trial assets are approximately £12 million greater than trial liabilities and in 2004; it is about £30 million greater. It seems The Body Shop is in greater need of external financing every year.
Another way to determine if external financing is needed is to analysis the external financing equation. Using this method, the company will need external financing for all three years. In 2002, The Body Shop will need £ 27,912 million in external financing. In 2003 and 2004, the need
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