Refer to the financial statements of the Nestl Group given in Appendix A at the end of

Refer to the financial statements of the Nestlé Group given in Appendix A at the end of this book.

1. What method does the company use to determine the cost of its inventory?

2. What are the components of the company's inventory balance? What aspects of its operations might determine why finished goods is the largest component?

3. Compute Nestlé's inventory turnover ratio for the year ended December 31, 2008.

4. If the company overstated ending inventory by 10 million Swiss francs for the year ended December 31, 2008, what would be the correct value for "profit before income taxes and associates"?