Body Shoop

Section 1

Financial situation of the firm at the closure of 2001 annual report

From the data available from the past three years it's possible to evince a lot of information concerning the overall finance and economic trends of the firm. In this way very interesting in our opinion is the analysis and the consequence of the dynamic of several indices of financial stability an of many others mainly concerning internal efficiency.

Indeed in this preliminary overview we won't pay much attention to the evolution of the company economic performance for two main reasons.

On one side in fact results enough clear the trend of a constant growth in the revenues and any analysis of the profitability of the firm would be biased by non redundant and exceptional costs.

On the other side it's not our interest to guarantee a full analysis for what does not concern the financial planning of the following years( so we'll focus our attention in making some reasonable hypothesis on the future rate of growth of revenues and cogs).

Passing to the cash flow statement (for a full version Appendix A) it's very interesting to observe the evolution of some indices of financial and efficiency performance of the firm that will help us in redacting its future financial plan.

But let's take some figures.

Table 1.1

Even simple looking to these indices we can start having a clearer idea of the financial situation of the firm at the beginning of a new financial plan( and so some starting clues to work with).

A) the long term debt exposition does not worry in the short term( the first two indices show that the recent restructuration of the firm was mainly done using shareholder equity.

B) the composition of the long term financing offers the opportunity of insisting even more with external financing in the new develop plan.

C) the behavior of the net working capital (in extended sense considering all the current forms of financing and uses) results quite stationary apart...