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:

a. What is your assumption regarding sales growth? How did you derive it?

b. Based on your pro forma projections, how much additional financing will The Body Shop need during 2002?

c. What are the three of four most important assumptions or key drivers in your forecast? What is the effect on the financing need of varying each of these assumptions up or down from the base case (Sensitivity Analysis)?

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 1999 2000 2000 (GBP) sales) 2001 2001 (GBP) sales GBP) sales Income Statement 303.7 100.0 Turnover 330.1 100.0 374.1 127.7 100.0 42.0 Cost of sales 130.9 39.7 149.0 39.8 176.0 Gross profit 58.0 199.2 60.3 225.1 60.2 Operating expenses: excluding exceptional 151.4 49.9 166.2 50.3 195.7 exceptional costs' 4.5 1.5 0.0 0.0 11.2 3.0 Restructuring costs? 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 0.9 (15.5) Profit (loss) retained (5.1 7.5 2.3 1.6 0.4