|Body Shop Worldwide PLC 2001 Case Study Solution - Summary of Financial Modeling
[pic][pic][pic][pic]The first question that usually proposed with this case study is within regards to the revenue concern; What was the reason for the lack of progress in earnings during the past due 90's? В The 2nd question deals with the rapid development in 2001; What was the main cause of the speedy increase in product sales in 2001 and what were the negative impacts of the rapid growth.
Problems surrounding the lack of growth in revenue:
In the early to mid 90's, the revenue growth intended for Body Store was at least 20% annually. В But by late 1990's, the revenue growth dropped to 8%. В Body system Shop was able to grow for a fast pace early in the decade because of the lack of competition. В But right at the end of the decade, the competition grew fierce. В Another reason for the slow expansion in the late 90's was the above expansion in the previous years. В Almost every mall in America (and shopping street in Britain) had a Body system Shop. В How will the Body Shop forecast earnings so they will not always be blind-sided by simply another decrease in OIBT?
Financial Foretelling of
This case research is very simple and straight-forward. В It usually is among the first instances presented in the lecture, as it is the first circumstance in the book because it is the easiest. В
Because of the lack of revenue expansion, Anita Roddick (founder with the Body Shop) was required to step-down from your CEO situation. В The clean management team, assembled by the new CEO Patrick Gournay, was able to increase revenue simply by 13% inside their first season (2001). В However , in their attempt to develop the earnings, they lost 21% within their OIBT. В В The major reason why this happened was because of a lack of predicting through the use of economic modeling. В
Key Facets of the Body Store Case Study (based on implied assumptions) 1 ) Because the cross types method of financial forecasting is used, the cost of goods sold like a...