2 How does the company deal with the volatile prices of cocoa and sugar?

This case extracts information from the annual report of Cadbury plc to show how the company explains its management of current assets.

The cost of inventories recognised as an expense for the period ended 31 December 2008 total £2,870 million (2007: £2,504 million).

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Current assets: balance sheets at 31 December 2008 Note 2008 2007 m m 19 Inventories 767 821 Short-term investments 247 2 20 Trade and other receivables 1,067 1,197 Tax recoverable 35 41 Cash and cash equivalents 251 493 27 Derivative financial instruments 268 46 2,635 2,600 Annual report 2008, p. 84. 19. Inventories 2008 2007 m m Raw materials and consumables 228 255 Work in progress 92 69 Finished goods and goods for resale 447 497 767 821