Introduction

This spreadsheet supports STUDENT analysis of the case, "The Body

Shop International Plc 2001" (Case 8)

Please note:

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.
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
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option.

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

Page 1
 A B C D E F G H I J K
1
2 Input Data Exhibit 1
3 The Body Shop Plc 2001: Format for Developing a Spreadsheet Model
4 SALES 422,733
5 COGS/SALES 0.38
6 OPERATING EXPENSES/SALES 0.50
7 INTEREST RATE 0.06
8 TAX RATE 0.30
9 DIVIDENDS (Thousand pounds) 10,900
10 CURR. ASSETS/SALES 0.32
11 CURR. LIABS./SALES 0.28
12 FIXED ASSETS 110,600
13 STARTING EQUITY 121,600
14
15 INCOME STATEMENT 2002
16
17 SALES
18 COGS
19 OPERATING EXPENSES
20 INTEREST EXPENSE (INCOME)
21 PROFIT BEFORE TAX
22 TAX
23 PROFIT AFTER TAX
24 DIVIDENDS
25 EARNINGS RETAINED
26
27 BALANCE SHEET 2002
28
29 CURRENT ASSETS
30 FIXED ASSETS
31 TOTAL ASSETS
32
33 CURRENT LIABILITIES
34 DEBT
35 EQUITY
36 TOTAL LIAB. & NET WORTH
 A B C
1
2 Exhibit 2
3 The Body Shop Plc 2001:
4 Spreadsheet Formulas to Forecast 2002 Financials:
5
6 Input Data
7
8 SALES 422,733
9 COGS/SALES 0.38
10 OPERATING EXPENSES/SALES 0.50
11 INTEREST RATE 0.06
12 TAX RATE 0.30
13 DIVIDENDS (Thousand pounds) 10,900
14 CURR. ASSETS/SALES 0.32
15 CURR. LIABS./SALES 0.28
16 FIXED ASSETS 110,600
17 STARTING EQUITY 121,600
18
19 INCOME STATEMENT 2002
20
21 SALES +B3
22 COGS +B4*B16
23 OPERATING EXPENSES +B5*B16
24 INTEREST EXPENSE (INCOME) +B6*B33
25 PROFIT BEFORE TAX +B16-B17-B18-B19
26 TAX +B7*B20
27 PROFIT AFTER TAX +B20-B21
28 DIVIDENDS +B8
29 EARNINGS RETAINED +B22-B23
30
31 BALANCE SHEET 2002
32
33 CURRENT ASSETS +B9*B16
34 FIXED ASSETS +B11
35 TOTAL ASSETS +B28+B29
36
37 CURRENT LIABILITIES +B10*B16
38 DEBT +B30-B32-B34
39 EQUITY +B12+B24
40 TOTAL LIAB. & NET WORTH +B32+B33+B34
 A B C D E F
1
2 Exhibit 3
3 The Body Shop Plc 2001:
4 Basic Forecasting Results for 2002
5
6 Input Data
7
8 SALES 422,733
9 COGS/SALES 0.38
10 OPERATING EXPENSES/SALES 0.50
11 INTEREST RATE 0.06
12 TAX RATE 0.30
13 DIVIDENDS (Thousand pounds) 10,900
14 CURR. ASSETS/SALES 0.32
15 CURR. LIABS./SALES 0.28
16 FIXED ASSETS 110,600
17 STARTING EQUITY 121,600
18
19 INCOME STATEMENT 2002
20
21 SALES 422,733
22 COGS 160,639
23 OPERATING EXPENSES 211,367
24 INTEREST EXPENSE (INCOME) (1,171)
25 PROFIT BEFORE TAX 51,899
26 TAX 15,570
27 PROFIT AFTER TAX 36,329
28 DIVIDENDS 10,900
29 EARNINGS RETAINED 25,429
30
31 BALANCE SHEET 2002
32
33 CURRENT ASSETS 135,275
34 FIXED ASSETS 110,600
35 TOTAL ASSETS 245,875
36
37 CURRENT LIABILITIES 118,365
38 DEBT (19,520)
39 EQUITY 147,029
40 TOTAL LIAB. & NET WORTH 245,875
 A B C
1
2 Exhibit 4
3 The Body Shop Plc 2001:
4 Adjusting to Reflect Excess Cash
5
6 Input Data
7
8 SALES 422,733
9 COGS/SALES 0.38
10 OPERATING EXPENSES/SALES 0.50
11 INTEREST RATE 0.06
12 TAX RATE 0.30
13 DIVIDENDS (Thousand pounds) 10,900
14 CURR. ASSETS/SALES 0.32
15 CURR. LIABS./SALES 0.28
16 FIXED ASSETS 110,600
17 STARTING EQUITY 121,600
18
19 INCOME STATEMENT 2002
20
21 SALES 422,733
22 COGS 160,639
23 OPERATING EXPENSES 211,367
24 INTEREST EXPENSE (INCOME) +(B6*B34)-(B6*B28)
25 PROFIT BEFORE TAX 40,706
26 TAX 14,247
27 PROFIT AFTER TAX 26,459
28 DIVIDENDS 10,900
29 EARNINGS RETAINED 15,559
30
31 BALANCE SHEET 2002
32
33 EXCESS CASH =IF(B40<0,-B40,0)
34 CURRENT ASSETS 135,275
35 FIXED ASSETS 110,600
36 TOTAL ASSETS +B29+B30+B28
37
38 CURRENT LIABILITIES 118,365
39 DEBT =IF(B40>0,+B40,0)
40 EQUITY 137,159
41 TOTAL LIAB. & NET WORTH +B33+B34+B35
42
43 TRIAL ASSETS +B29+B30
44 TRIAL LIABILITIES AND EQUITY +B33+B35
45 PLUG: DEBT (EXCESS CASH) +B38-B39
 A B C D E
1
2 Exhibit 5
3 The Body Shop Plc 2001:
4 Finished Results for 2002, Reflecting Excess Cash
5 2003 2004
6 Input Data
7
8 SALES 411,923 453,570 499,428
9 COGS/SALES 0.38 0.38 0.38
10 OPERATING EXPENSES/SALE 0.50 0.50 0.50
11 INTEREST RATE 0.06 0.06 0.06
12 TAX RATE 0.30 0.30 0.30
13 DIVIDENDS (Thousand pounds) 10,900 10,900 10,900
14 CURR. ASSETS/SALES 0.33 0.33 0.33
15 CURR. LIABS./SALES 0.11 0.11 0.11
16 FIXED ASSETS 110,600 132,783 146,208
17 STARTING EQUITY 121,600 161,471 177,796
18
19 INCOME STATEMENT 2002
20
21 SALES 411,923 453,570 499,428
22 COGS 156,531 172,357 189,783
23 OPERATING EXPENSES 205,962 226,785 249,714
24 INTEREST EXPENSE (INCOME 3,502 2,749 2,958
25 PROFIT BEFORE TAX 45,928 51,679 56,973
26 TAX 13,779 15,504 17,092
27 PROFIT AFTER TAX 32,150 36,175 39,881
28 DIVIDENDS 10,900 10,900 10,900
29 EARNINGS RETAINED 21,250 25,275 28,981
30
31 BALANCE SHEET 2002
32
33 EXCESS CASH 0 0 0
34 CURRENT ASSETS 135,935 149,678 164,811
35 FIXED ASSETS 110,600 132,783 146,208
36 TOTAL ASSETS 246,535 282,461 311,019
37
38 CURRENT LIABILITIES 45,312 49,893 54,937
39 DEBT 58,373 45,822 49,304
40 EQUITY 142,850 186,746 206,778
41 TOTAL LIAB. & NET WORTH 246,535 282,461 311,019
42
43 TRIAL ASSETS 246,535 282,461 311,019
44 TRIAL LIABILITIES AND EQU 188,161 236,639 261,715
45 PLUG: DEBT (EXCESS CASH) 58,373 45,822 49,304
 A B C D E F G
1
2 Exhibit 6
3 The Body Shop Plc 2001:
4 Set up for a Forecast with Data Table
5
6 Input Data
7
8 SALES 422,733
9 COGS/SALES 0.38
10 OPERATING EXPENSES/SALES 0.50 Sensitivity Analysis
11 INTEREST RATE 0.06 Of Debt and Excess Cash
12 TAX RATE 0.30 To COGS/SALES Ratio
13 DIVIDENDS (Thousand pounds) 10,900
14 CURR. ASSETS/SALES 0.32 COGS/SALES DEBT Ex. CASH
15 CURR. LIABS./SALES 0.28 =B34 =B28
16 FIXED ASSETS 110,600 0.35
17 STARTING EQUITY 121,600 0.38
18 0.40
19 INCOME STATEMENT 2002 0.42
20 0.44
21 SALES 422,733 0.45
22 COGS 160,639 0.48
23 OPERATING EXPENSES 211,367
24 INTEREST EXPENSE (INCOME) (1,171)
25 PROFIT BEFORE TAX 51,899
26 TAX 15,570
27 PROFIT AFTER TAX 36,329
28 DIVIDENDS 10,900
29 EARNINGS RETAINED 25,429
30
31 BALANCE SHEET 2002
32
33 EXCESS CASH 19,520
34 CURRENT ASSETS 135,275
35 FIXED ASSETS 110,600
36 TOTAL ASSETS 265,395
37
38 CURRENT LIABILITIES 118,365
39 DEBT -
40 EQUITY 147,029
41 TOTAL LIAB. & NET WORTH 265,395
42
43 TRIAL ASSETS 245,875
44 TRIAL LIABILITIES AND EQUITY 265,395
45 PLUG: DEBT (EXCESS CASH) (19,520)
 A B C D E F G H
1
2 Exhibit 7
3 The Body Shop Plc 2001:
4 Finished Forecast with Data Table
5
6 Input Data
7
8 SALES 422,733
9 COGS/SALES 0.38
10 OPERATING EXPENSES/SALES 0.50 Sensitivity Analysis
11 INTEREST RATE 0.06 Debt and Excess Cash
12 TAX RATE 0.30 By COGS/SALES
13 DIVIDENDS (Thousand pounds) 10,900.00
14 CURR. ASSETS/SALES 0.32 COGS/SALES DEBT Ex. CASH
15 CURR. LIABS./SALES 0.28 +B34 +B28
16 FIXED ASSETS 110,600 0.35 0 28,787
17 STARTING EQUITY 121,600 0.38 0 19,520
18 0.40 0 13,342
19 INCOME STATEMENT 2002 0.42 0 7,165
20 0.44 0 987
21 SALES 422,733 0.45 2,102 0
22 COGS 160,639 0.48 11,369 0
23 OPERATING EXPENSES 211,367
24 INTEREST EXPENSE (INCOME) (1,171)
25 PROFIT BEFORE TAX 51,899
26 TAX 15,570
27 PROFIT AFTER TAX 36,329
28 DIVIDENDS 10,900
29 EARNINGS RETAINED 25,429
30
31 BALANCE SHEET 2002
32
33 EXCESS CASH 19,520
34 CURRENT ASSETS 135,275
35 FIXED ASSETS 110,600
36 TOTAL ASSETS 265,395
37
38 CURRENT LIABILITIES 118,365
39 DEBT 0
40 EQUITY 147,029
41 TOTAL LIAB. & NET WORTH 265,395
42
43 TRIAL ASSETS 245,875
44 TRIAL LIABILITIES AND EQUITY 265,395
45 PLUG: DEBT (EXCESS CASH) (19,520)
Exhibit 8
The Body Shop Plc 2001:
Historical Financial Statements ( in GBP millions)

Fiscal Year Ended February 28

1999 1999 2000 2000 2001 2001

(GBP) (% sales) (GBP) (% sales) (GBP) (% sales)
Income Statement

Turnover 303.7 100.0 330.1 100.0 374.1 100.0

Cost of sales 127.7 42.0 130.9 39.7 149.0 39.8
Gross profit 176.0 58.0 199.2 60.3 225.1 60.2

Operating expenses:
–excluding exceptional costs 151.4 49.9 166.2 50.3 195.7 52.3
–exceptional costs1 4.5 1.5 0.0 0.0 11.2 3.0
Restructuring costs2 16.6 5.5 2.7 0.8 1.0 0.3
Net interest expense 0.1 0.0 1.5 0.5 4.4 1.2
Profit before tax 3.4 1.1 28.8 8.7 12.8 3.4
Tax expense 8.0 2.6 10.4 3.2 3.5 0.9
Profit (loss) after tax (4.6) (1.5) 18.4 5.6 9.3 2.5

Ordinary dividends 10.9 3.6 10.9 3.3 10.9 2.9

Profit (loss) retained (15.5) (5.1) 7.5 2.3 (1.6) (0.4)

Fiscal Year Ended February 28

1999 1999 2000 2000 2001 2001

Balance Sheet (GBP) (% sales) (GBP) (% sales) (GBP) (% sales)

Assets 37.2 33.3 30.2

Cash 34.0 11.2 19.2 5.8 13.7 3.7
Accounts receivable 27.8 9.2 30.3 9.2 30.3 8.1
Inventories 38.6 12.7 44.7 13.5 51.3 13.7
Other current assets 12.5 4.1 15.6 4.7 17.5 4.7
Net fixed assets 87.8 28.9 104.7 31.7 110.6 29.6
Other assets3 0.0 0.0 6.0 1.8 6.7 1.8
Total assets 200.7 66.1 220.5 66.8 230.1 61.5

Liabilities and equity 11.6 14.6 8.0

Accounts payable 13.0 4.3 20.5 6.2 10.7 2.9
Taxes payable 11.3 3.7 11.7 3.5 7.1 1.9
Accruals 10.8 3.6 15.6 4.7 11.5 3.1
Overdrafts 0.0 0.0 0.3 0.1 0.7 0.2
Other current liabilities 21.6 7.1 13.3 4.0 16.9 4.5
Long-term liabilities 28.0 9.2 36.7 11.1 61.2 16.4
Other liabilities4 1.7 0.6 1.0 0.3 0.4 0.1
Shareholders' equity 114.3 37.6 121.4 36.8 121.6 32.5
Total liabilities and equity 200.7 66.1 220.5 66.8 230.1 61.5

1
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.
2
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.
3
Other assets in 2001 and 2000 represented receivables relating to the sale of the company's Littlehampton manufacturing plant.
4
Other liabilities included mostly deferred taxes.
 1999 2000 2001 2002
303.7 330.1 374.1 411.923
8.7% 13.3%
11.0%
 2003 2004
453.570 499.428