The body Shop Case study Question 1: Base Case Assumptions In order to derive this forecast‚ ‘percent-of-sales’ forecasting was used‚ which involves initially forecasting sales and then forecasting other financial statement accounts based on their direct relationship with sales. This method of forecasting was used due to the lack of information available (only the last three years of financial statements). As a result‚ every account in the pro forma financial statements are based on one or more
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The Body Shop International In this case‚ the key is to understand and study the conditions and circumstances of how revenue grew by 13 percent and the decline in pretax profit of 21 percent in 2001. The underlying factor that caused this‚ would be the company’s lack of forecasting‚ which would be the usage of the financial modeling. The financial model gives a better forecast prior to the project as well as a good monitor during the project. For the forecast‚ we only had financial statements from
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History of The Body Shop International In the early to mid 90’s‚ the revenue growth for The Body Shop was at least 20% each year. The Body Shop was able to grow at a fast pace early in the decade because of the lack of competition. Over the course of the decade‚ competition grew fierce‚ and‚ by the end of the decade‚ revenue growth fell to 8%. Another reason for the slow growth in the late 90’s was the over expansion in the previous years. The Body Shop was in almost every mall in America (and
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years forecast for The Body Shop International; it consists of three main objectives: • To enhance The Body Shop brand through a focused product strategy and increased investments in stores; • To achieve operational efficiencies in the supply chain by reducing product and inventory costs; • To reinforce the stakeholders culture. We extrapolate each account using the percentage of sales of year 2001 to have a first look on the evolution of the financial statements regarding
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Introduction The beauty industry has been a multi-billion dollar industry over the past few decades. Despite the current economic state the industry has averaged a growth rate of 5%. The industry of “green” beauty products began over 30 years ago. People started seeing what the harmful chemicals in products were doing harm not only to their skin and hair but the environment they lived in. As environmental awareness grows so will the demand for organic and environmentally friendly products.
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founder‚ The Body Shop International In the late 1990s‚ The Body Shop International PLC‚ previously one of the fastest growing manufacturer-retailers in the world‚ ran aground. Although the firm had an annual revenue growth rate of 20% in the early to middle 1990s‚ by the late 1990s‚ revenue growth slowed to around 8%. New retailers of the naturally based skin- and hair-care products entered the market‚ bringing intense competition for The Body Shop. Amidst the competition‚ The Body Shop failed to
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FINANCIAL MODELING The materials in this book are intended for instructional and educational purposes‚ to illustrate situations similar to those encountered in the real world. The reader will understand that MIT Press and its authors do not guarantee the accuracy or completeness of any information published in this book. Neither MIT Press nor its authors is responsible for the consequences of the implementation of models or information presented in this book. FINANCIAL MODELING Simon Benninga
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The Body Shop International Case Study 1. The assumptions that were used to derive the numbers in this forecast were found by taking the averages of the historical data that was given for 1999-2001. Instead of using the assumptions that were given by The Body Shop‚ I thought it would be more practical to use the trends shown in the historical data since that is more relevant to what might happen‚ rather than what The Body Shop wants to see happen. Of course it is possible to take reducing
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Anita Roddick‚ OBE‚ and The body Shop International Plc FEDBACK FOR QUESTION WEEK 3 for week commencing 19.03.12 1. Evaluate the Financial Position of the Company (at the time of the case study) and comment upon the apparent success or otherwise of its strategy‚ based on your findings. Introduction We may consider a company’s strategy from a number of aspects‚ but generally we are interested in answering the question: How well is the company’s present strategy working? To understand and
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The Body Shop Table of contents Introduction : 2 Section A 3 A comprehensive strategic analysis of the industry : 3 Question 1 3 1) The external strategic analysis of The Body Shop 3 1.1° Synopsis of the beauty industry: Macroenvironement and trends 3 1.2° The competition: immediate industry and competitive environment 5 1.3°The key success factors of the beauty industry and The Body Shop 7 1.4) The SW(OT) analysis of The Body Shop 8 Question 2:
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