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Obtain Nestle's 2010 annual report using the ''Investor Relations'' portion of its website (do a web search

Question:

Obtain Nestle´'s 2010 annual report using the ''Investor Relations'' portion of its website (do a web search for Nestle investor relations).
Required:
1. Which inventory method does Nestle´ use? Why doesn't Nestle´ use LIFO?
2. Describe the composition of Nestle´'s inventory.
3. Assume Nestle´'s 2008 ending inventory was CHF 9,342 million. Compute the inventory turnover for 2010 and 2009. What is your evaluation of the difference?
Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula                Ending Inventory Formula =...
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1 Nestl uses FIFO for raw materials inventory and purchased finished goods inventory All other inven...View the full answer


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Related Video

Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.

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