Exhibit 8 presents the full range of accounts as actually reported by the Body Shop in 2001. Please forecast all of the accounts individually for 2002 and present your result in a spreadsheet similar to Exhibit 7. Provide detailed interpretation of your spreadsheet by answering the following questions:

RESULTS ON EXCEL IS ABOVE, JUST DO WRITTEN ASSUMPTION INTERPRETATION PLEASE (3-5 PAGES EXPLANATION IF POSSIBLE)

****MUST JUSTIFY ASSUMPTIONS***

A.How did you derive the forecast? Why did you choose the Base-Case assumptions that you did?

B.Based on your pro forma projections, how much additional financing will The Body Shop need during this period?

C.What are the three or four most important assumptions or key drivers in this forecast? What is the effect on the financing need of varying each of these assumptions or down from the base case? Intuitively, why are these assumptions so important?

D.Why are your findings relevant to a general manager like Roddick? What are the implications of these findings for her? What action should she take based on your analysis?

MUST ANSWER ALL PARTS

Case 9 The Body Shop International PLC 2001: An Introduction to Financial Modeling 159 EXHIBIT 8 Historical Financial Statements (GBP in millions) Fiscal Year Ended February 28 1999 2000 2000 (% sales) (GBP) (% sales) 1999 (GBP) 2001 (GBP) 2001 (% sales) 303.7 127.7 176.0 100.0 330.1 42.0 130.9 58.0 199.2 100.0 39.7 60.3 Income Statement Turnover Cost of sales Gross profit Operating expenses: - excluding exceptional costs - exceptional costs ondes 374.1 149.0 225.1 100.0 39.8 60.2 Restructuring costs Net interest expense Profit before tax Tax expense Profit (loss) after tax 151.4 4.5 16.6 0.1 3.4 8.0 (4.6) 10.9 (15.5) 49.9 1.5 5.5 0.0 1.1 2.6 (1.5) 166.2 0.0 2.7 1.5 28.8 10.4 18.4 50.3 0.0 0.8 0.5 8.7 3.2 5.6 195.7 11.2 1.0 4.4 12.8 3.5 9.3 52.3 3.0 0.3 1.2 3.4 0.9 2.5 Ordinary dividends Profit (loss) retained 3.6 (5.1) 10.9 7.5 3.3 2.3 10.9 (1.6) 2.9 (0.4) 160 Part Two Financial Analysis and shots EXHIBIT 8 | Historical Financial Statements (GBP in millions) (continued) Fiscal Year Ended February 28 2000 (% sales) 2001 (GBP) 2000 (GBP) 1999 (% sales) 1999 (GBP) 2001 (% sales Inc Balance Sheet Assets 5.8 9.2 Cash 13.5 Accounts receivable Inventories Other current assets Net fixed assets Other assets Total assets 34.0 27.8 38.6 12.5 87.8 0.0 200.7 11.2 19.2 9.2 30.3 12.7 44.7 4.1 15.6 28.9 104.7 0.0 6.0 66.1 220.5 4.7 31.7 1.8 66.8 13.7 3.7 30.3 no 8.1 51.3 13.7 17.5 4.7 110.6 29.6 6.7 1.8 230.1 61.5 Liabilities and equity Accounts payable Taxes payable Accruals Overdrafts Other current liabilities Long-term liabilities Other liabilities Shareholders' equity Total liabilities and equity 13.0 11.3 10.8 0.0 21.6 28.0 1.7 114.3 200.7 4.3 3.7 3.6 0.0 7.1 9.2 0.6 37.6 66.1 20.5 6.2 11.7 3.5 15.6 4.7 0.3 0.1 13.3 4.0 11.1 1.0 0.3 121.4 36.8 66.8 10.7 7.1 11.5 0.7 16.9 61.2 0.4 121.6 230.1 2.9 1.9 3.1 0.2 4.5 16.4 0.1 32.5 61.5 36.7 220.5 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 United States. Restructuring costs in 2001 and 2000 relate to the sale of manufacturing plants in Littlehampton, England, and to associated reorganiza- tion costs. Restructuring costs in 1999 arose from the realignment of the management structure of the business in the United States and the United Kingdom. Other assets in 2001 and 2000 represented receivables related to the sale of the company's Littlehampton manufacturing plant. Other liabilities included mostly deferred taxes. Fiscal Year Ended February 28 Assumptions Foreca: 2002-2004 2000 330.1 130.9 199.2 2001 374.1 149.0 225.1 Growth % sales 13.0% 40.0% 2002 422.7 169.1 253.6 % 39.7% 39.8% % % % 50.3% 0.0% 0.8% 52.3% 3.0% 0.3% 166.2 0.0 2.7 1.5 28.8 10.4 18.4 195.7 11.2 1.0 4.4 12.8 3.5 9.3 Vo sates % sales % sales Debt. EFN and Excess Cash 52.0% 0.0% 0.0% 6.0% 219.8 0.0 0.0 4.4 29.4 8.8 20.6 ll% of PBT 30.0% Constant 10.9 10.9 7.5 10.9 (1.6) 10.9 9.7 % 19.2 5.8% 13.7 3.7% % sales 4.0% Plug + 16 30.3 44.7 15.6 104.7 6.0 220.5 9.2% 13.5% 4.7% 31.7% 1.8% 66.8% 30.3 51.3 17.5 110.6 6.7 230.1 8.1% 13.7% 4.7% 29.6% 1.8% 61.5% % sales % sales % sales 1% sales % sales 8.0% 13.7% 4.7% 30.0% 1.8% 16.9 0.0 33.8 57.9 19.9 126.8 7.6 % 6 6 262.9 6 6 6 % -6 20.5 11.7 15.6 0.3 13.3 36.7 6.2% 3.5% 4.7% 0.1% 4.0% 10.7 7.1 11.5 0.7 16.9 61.2 2.9% 1.9% 3.1% 0.2% 4.5% % sales % sales % sales % sales % sales Fixed Plug 1% sales 4.0% 2.0% 3.5% 0.2% 4.0% 16.9 8.5 14.8 0.8 16.9 61.2 12.1 0.4 131.3 262.9 0.3% 0.1% 0.1% 1.0 121.4 220.5 0.4 121.6 230.1 Trial assets Trial liabs & equity Trial plug 262.9 250.8 12.1