In the first worksheet of the template file youwill have to predict the future financial statements

of the Body Shop. Use the figures for $2017$ and the forecasting assumptions on the template to

forecast the income statement and the balance sheet for the next three years. For some

variables there are no assumptions provided since they should be calculated rather than

predicted $($e$.$g$.$ retained earnings$).$ Cash and short$-$term debt are the two plug items.

Assumptions for the cash and debt plugs are described in question a$.$

QUESTION A $(2$ POINTS$)$:

Forecast the Income Statement and the Balance Sheet for the next three years $(2021-2023).$ The

Body Shop, Inc. wants to maintain at least $$400$ of cash in all years. For debt the assumptions

are slightly different for each year but they do have some common features. The company does

not want to have a total debt ratio that is less than $50\%($in all years$).$ If new debt is needed

the company will have to increase debt. However, if there is no need for additional debt, the

following assumptions hold: a$)$ for $2021$ the company does not want to retire any debt, b$)$ for

$2022$ the company can retire debt but not more than $75\%$ of last year$$s debt, and c$)$ for $2023,$

the company can retire as much debt as possible.