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Model Facts

Copyright 2001 by the Trustees of the University of Virginia Darden School Foundation.
Revised, March 7, 2006.

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Model Facts

This spreadsheet supports student analysis of the case, "The Body Shop International Plc
2001" (Case 9)
Please note:

1) This is a working model. Assumptions / Inputs presented can be changed to vary the results.

2) This spreadsheet incorporates circular logical reference. To resolve this circularity, please
instruct Excel to "iterate" several times in calculating the results. This is accomplished by
clicking on Tools/Options/Calculation, and then checking the iteration box.

3) As long as default spreadsheet calculation is set as "automatic" impact of changing


assumptions will be computed in real time. Alternatively the F9 function key may need to be
invoked to recalculate results. To set the numerical calculation settings to automatic, please
click on Tools/Options/Calculations menu, and check the automatic calculation option.

Copyright 2001 by the Trustees of the University of Virginia Darden School Foundation.
Revised, March 7, 2006.

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Exhibit 1

Input Data

The Body Shop Plc 2001: Format for Developing a Spreadsheet Model
SALES

422,733

COGS/SALES
OPERATING EXPENSES/SALES
INTEREST RATE
TAX RATE
DIVIDENDS (Thousand pounds)
CURR. ASSETS/SALES
CURR. LIABS./SALES
FIXED ASSETS
STARTING EQUITY

0.38
0.50
0.06
0.30
10,900
0.32
0.28
110,600
121,600

INCOME STATEMENT

2002

SALES
COGS
OPERATING EXPENSES
INTEREST EXPENSE (INCOME)
PROFIT BEFORE TAX
TAX
PROFIT AFTER TAX
DIVIDENDS
EARNINGS RETAINED
BALANCE SHEET
CURRENT ASSETS
FIXED ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
DEBT
EQUITY
TOTAL LIAB. & NET WORTH

2002

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Exhibit 2

The Body Shop Plc 2001:


Spreadsheet Formulas to Forecast 2002 Financials:

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Input Data
SALES
COGS/SALES
OPERATING EXPENSES/SALES
INTEREST RATE
TAX RATE
DIVIDENDS (Thousand pounds)
CURR. ASSETS/SALES
CURR. LIABS./SALES
FIXED ASSETS
STARTING EQUITY

422,733
0.38
0.50
0.06
0.30
10,900
0.32
0.28
110,600
121,600

INCOME STATEMENT
SALES
COGS
OPERATING EXPENSES
INTEREST EXPENSE (INCOME)
PROFIT BEFORE TAX
TAX
PROFIT AFTER TAX
DIVIDENDS
EARNINGS RETAINED

2002
+B3
+B4*B16
+B5*B16
+B6*B33
+B16-B17-B18-B19
+B7*B20
+B20-B21
+B8
+B22-B23

BALANCE SHEET

2002

CURRENT ASSETS
FIXED ASSETS
TOTAL ASSETS

+B9*B16
+B11
+B28+B29

CURRENT LIABILITIES
DEBT
EQUITY
TOTAL LIAB. & NET WORTH

+B10*B16
+B30-B32-B34
+B12+B24
+B32+B33+B34

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Exhibit 3

The Body Shop Plc 2001:


Basic Forecasting Results for 2002

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Input Data
SALES
COGS/SALES
OPERATING EXPENSES/SALES
INTEREST RATE
TAX RATE
DIVIDENDS (Thousand pounds)
CURR. ASSETS/SALES
CURR. LIABS./SALES
FIXED ASSETS
STARTING EQUITY
INCOME STATEMENT
SALES
COGS
OPERATING EXPENSES
INTEREST EXPENSE (INCOME)
PROFIT BEFORE TAX
TAX
PROFIT AFTER TAX
DIVIDENDS
EARNINGS RETAINED
BALANCE SHEET

422,733
0.38
0.50
0.06
0.30
10,900
0.32
0.28
110,600
121,600
2002
422,733
160,639
211,367
(1,171)
51,899
15,570
36,329
10,900
25,429
2002

CURRENT ASSETS
FIXED ASSETS
TOTAL ASSETS

135,275
110,600
245,875

CURRENT LIABILITIES
DEBT
EQUITY
TOTAL LIAB. & NET WORTH

118,365
(19,520)
147,029
245,875

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Exhibit4

TheBodyShopPlc2001:
AdjustingtoReflectExcessCash

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InputData
SALES
COGS/SALES
OPERATINGEXPENSES/SALES
INTERESTRATE
TAXRATE
DIVIDENDS(Thousandpounds)
CURR.ASSETS/SALES
CURR.LIABS./SALES
FIXEDASSETS
STARTINGEQUITY

422,733
0.38
0.50
0.06
0.30
10,900
0.32
0.28
110,600
121,600

INCOMESTATEMENT
SALES
COGS
OPERATINGEXPENSES
INTERESTEXPENSE(INCOME)
PROFITBEFORETAX
TAX
PROFITAFTERTAX
DIVIDENDS
EARNINGSRETAINED

2002
422,733
160,639
211,367
+(B6*B34)(B6*B28)
40,706
14,247
26,459
10,900
15,559

BALANCESHEET

2002

EXCESSCASH
CURRENTASSETS
FIXEDASSETS
TOTALASSETS

=IF(B40<0,B40,0)
135,275
110,600
+B29+B30+B28

CURRENTLIABILITIES
DEBT
EQUITY
TOTALLIAB.&NETWORTH

118,365
=IF(B40>0,+B40,0)
137,159
+B33+B34+B35

TRIALASSETS
TRIALLIABILITIESANDEQUITY
PLUG:DEBT(EXCESSCASH)

+B29+B30
+B33+B35
+B38B39

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Exhibit 5

The Body Shop Plc 2001:


Finished Results for 2002, Reflecting Excess Cash

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Input Data
SALES
COGS/SALES
OPERATING EXPENSES/SALES
INTEREST RATE
TAX RATE
DIVIDENDS (Thousand pounds)
CURR. ASSETS/SALES
CURR. LIABS./SALES
FIXED ASSETS
STARTING EQUITY
INCOME STATEMENT
SALES
COGS
OPERATING EXPENSES
INTEREST EXPENSE (INCOME)
PROFIT BEFORE TAX
TAX
PROFIT AFTER TAX
DIVIDENDS
EARNINGS RETAINED
BALANCE SHEET

422,733
0.38
0.50
0.06
0.30
10,900
0.32
0.28
110,600
121,600
2002
422,733
160,639
211,367
(1,171)
51,899
15,570
36,329
10,900
25,429
2002

EXCESS CASH
CURRENT ASSETS
FIXED ASSETS
TOTAL ASSETS

19,520
135,275
110,600
265,395

CURRENT LIABILITIES
DEBT
EQUITY
TOTAL LIAB. & NET WORTH

118,365
0
147,029
265,395

TRIAL ASSETS
TRIAL LIABILITIES AND EQUITY
PLUG: DEBT (EXCESS CASH)

245,875
265,395
(19,520)

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Exhibit 6

The Body Shop Plc 2001:


Set up for a Forecast with Data Table

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Input Data
SALES
COGS/SALES
OPERATING EXPENSES/SALES
INTEREST RATE
TAX RATE
DIVIDENDS (Thousand pounds)
CURR. ASSETS/SALES
CURR. LIABS./SALES
FIXED ASSETS
STARTING EQUITY
INCOME STATEMENT
SALES
COGS
OPERATING EXPENSES
INTEREST EXPENSE (INCOME)
PROFIT BEFORE TAX
TAX
PROFIT AFTER TAX
DIVIDENDS
EARNINGS RETAINED
BALANCE SHEET

422,733
0.38
0.50
0.06
0.30
10,900
0.32
0.28
110,600
121,600
2002
422,733
160,639
211,367
(1,171)
51,899
15,570
36,329
10,900
25,429
2002

EXCESS CASH
CURRENT ASSETS
FIXED ASSETS
TOTAL ASSETS

19,520
135,275
110,600
265,395

CURRENT LIABILITIES
DEBT
EQUITY
TOTAL LIAB. & NET WORTH

118,365
147,029
265,395

TRIAL ASSETS
TRIAL LIABILITIES AND EQUITY
PLUG: DEBT (EXCESS CASH)

245,875
265,395
(19,520)

Sensitivity Analysis
Of Debt and Excess Cash
To COGS/SALES Ratio
COGS/SALES
0.35
0.38
0.40
0.42
0.44
0.45
0.48

DEBT
=B34

Ex. CASH
=B28

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Exhibit 7

The Body Shop Plc 2001:


Finished Forecast with Data Table

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Input Data
SALES
COGS/SALES
OPERATING EXPENSES/SALES
INTEREST RATE
TAX RATE
DIVIDENDS (Thousand pounds)
CURR. ASSETS/SALES
CURR. LIABS./SALES
FIXED ASSETS
STARTING EQUITY
INCOME STATEMENT
SALES
COGS
OPERATING EXPENSES
INTEREST EXPENSE (INCOME)
PROFIT BEFORE TAX
TAX
PROFIT AFTER TAX
DIVIDENDS
EARNINGS RETAINED
BALANCE SHEET

422,733
0.38
0.50
0.06
0.30
10,900.00
0.32
0.28
110,600
121,600
2002
422,733
160,639
211,367
(1,171)
51,899
15,570
36,329
10,900
25,429
2002

EXCESS CASH
CURRENT ASSETS
FIXED ASSETS
TOTAL ASSETS

19,520
135,275
110,600
265,395

CURRENT LIABILITIES
DEBT
EQUITY
TOTAL LIAB. & NET WORTH

118,365
0
147,029
265,395

TRIAL ASSETS
TRIAL LIABILITIES AND EQUITY
PLUG: DEBT (EXCESS CASH)

245,875
265,395
(19,520)

Sensitivity Analysis
Debt and Excess Cash
By COGS/SALES
COGS/SALES
0.35
0.38
0.40
0.42
0.44
0.45
0.48

DEBT
+B34
0
0
0
0
0
2,102
11,369

Ex. CASH
+B28
28,787
19,520
13,342
7,165
987
0
0

Exhibit 8
The Body Shop Plc 2001:
Historical Financial Statements ( in GBP millions)
Fiscal Year Ended February 28
1999
(GBP)

1999
(% sales)

2000
(GBP)

2000
(% sales)

2001
(GBP)

2001
(% sales)

Turnover
Cost of sales
Gross profit

303.7
127.7
176.0

100.0
42.0
58.0

330.1
130.9
199.2

100.0
39.7
60.3

374.1
149.0
225.1

100.0
39.8
60.2

Operating expenses:
excluding exceptional costs

151.4

49.9

166.2

50.3

195.7

52.3

4.5

1.5

0.0

0.0

11.2

3.0

Restructuring costs2
Net interest expense
Profit before tax
Tax expense
Profit (loss) after tax

16.6
0.1
3.4
8.0
(4.6)

5.5
0.0
1.1
2.6
(1.5)

2.7
1.5
28.8
10.4
18.4

0.8
0.5
8.7
3.2
5.6

1.0
4.4
12.8
3.5
9.3

0.3
1.2
3.4
0.9
2.5

Ordinary dividends
Profit (loss) retained

10.9
(15.5)

3.6
(5.1)

10.9
7.5

3.3
2.3

10.9
(1.6)

2.9
(0.4)

Income Statement

exceptional costs1

Fiscal Year Ended February 28

Balance Sheet
Assets
Cash
Accounts receivable
Inventories
Other current assets
Net fixed assets
Other assets3
Total assets
Liabilities and equity
Accounts payable
Taxes payable
Accruals
Overdrafts
Other current liabilities
Long-term liabilities
Other liabilities4
Shareholders' equity
Total liabilities and equity

1999
(GBP)

1999
(% sales)

2000
(GBP)

2000
(% sales)

2001
(GBP)

2001
(% sales)

34.0
27.8
38.6
12.5
87.8

11.2
9.2
12.7
4.1
28.9

19.2
30.3
44.7
15.6
104.7

5.8
9.2
13.5
4.7
31.7

13.7
30.3
51.3
17.5
110.6

3.7
8.1
13.7
4.7
29.6

0.0
200.7

0.0
66.1

6.0
220.5

1.8
66.8

6.7
230.1

1.8
61.5

13.0
11.3
10.8
0.0
21.6
28.0

4.3
3.7
3.6
0.0
7.1
9.2

20.5
11.7
15.6
0.3
13.3
36.7

6.2
3.5
4.7
0.1
4.0
11.1

10.7
7.1
11.5
0.7
16.9
61.2

2.9
1.9
3.1
0.2
4.5
16.4

1.7
114.3
200.7

0.6
37.6
66.1

1.0
121.4
220.5

0.3
36.8
66.8

0.4
121.6
230.1

0.1
32.5
61.5

Exceptional costs in 2001 included redundancy costs (4.6 million), costs of supply chain development (2.4 million) and impairment of fixed assets and goodwill (4.2 million). The
exceptional costs of 4.5 million in 1999 were associated with closing unprofitable shops and an impairment review of the remaining shops in the USA.
1

Restructuring costs in 2001 and 2000 relate to the sale of manufacturing plants in Littlehampton, England, and to associated reorganization costs. Restructuring costs in 1999 arose
from the realignment of the management structure of the business in the US and the UK.
2

Other assets in 2001 and 2000 represented receivables relating to the sale of the company's Littlehampton manufacturing plant.

Other liabilities included mostly deferred taxes.

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