Body Shop Essay

1378 Words Nov 27th, 2012 6 Pages
Why would a company like the Body Shop want to forecast its financial statements?

Forecasting a firm's financial statements can help both financial managers and general managers. Pro forma statements help the financial manager plan the firm's financial needs. With an estimate of future income statement and balance sheet accounts, a manager can tell how much financing might be needed, and when it might be needed. Therefore, a company like the Body Shop can use forecasted financial statements to estimate how much future external debt financing the company needs.
Given the Body Shop’s growth level of 36.8% and 27.5% in the period between 1990-1992, it is assumed that the Body Shop will be able to sustain a relatively high growth rate
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Liabilities-Shareholders’ Equity | Common Equity | 93,419,349 | 74,360,000 + Retained Earnings |

| Trial 1 | Trial 2 | Trial 3 | Trial 4 | Trial 5 | Sales | 191,673,000 | 191,673,000 | 191,673,000 | 191,673,000 | 191,673,000 | COGS | 84,336,120 | 84,336,120 | 84,336,120 | 84,336,120 | 84,336,120 | Distribution & Administration Expense | 69,002,280 | 69,002,280 | 69,002,280 | 69,002,280 | 69,002,280 | Interest Expense | 0 | 2,246,906 | 2,128,606 | 2,134,835 | 2,134,507 | Profit Before Taxes | 38,334,600 | 36,087,694 | 36,205,994 | 36,199,765 | 36,200,093 | Tax | 13,417,110 | 12,630,693 | 12,672,097 | 12,669,918 | 12,670,033 | Profit After Tax | 24,917,490 | 23,457,001 | 23,533,897 | 23,529,847 | 23,530,060 | Dividends | 4,734,323 | 4,456,830 | 4,471,440 | 4,470,671 | 4,470,711 | Earnings Retained | 20,183,167 | 19,000,171 | 19,062,457 | 19,059,176 | 19,059,349 | Current Assets | 80,502,660 | 80,502,660 | 80,502,660 | 80,502,660 | 80,502,660 | Fixed Assets | 58,657,000 | 58,657,000 | 58,657,000 | 58,657,000 | 58,657,000 | Total Assets | 139,159,660 | 139,159,660 | 139,159,660 | 139,159,660 | 139,159,660 | Current Liabilities | 67,085,550 | 67,085,550 | 67,085,550 | 67,085,550 | 67,085,550 | Debt | (22,469,057) | (21,286,061) | (21,348,347) |