1. Suppose you are a Nestle shareholder. If you could pick one item on the company's Con­solidated Income Statement to increase year after year, what would it be and why? Did thisitem increase or decrease during 2016? What does this mean for Nestle?
2. What was Nestle's largest expense for 2016? In your own words, explain what you under­ standby this item.
3. Investors are keenly interested not just in a company's sales and profits for a given year, but intrends in its sales and profits over time. Consider Nestle's sales and net income during theperiod from 2014 through 2016. Can you offer a possible explanation for these changes?
4. Use the Consolidated Balance Sheets of Nestle in Appendix A to answer these questions:
   1. At the end of 2016, how much in total resources did Nestle have to work with?
   2. How much of these resources did the company owe to external parties?
   3. How much of these resources did the company's shareholders actually own? Use theseamounts to write Nestle's accounting equation at December 31, 2016.
5. Examine retained earnings in the Statement of Changes in Equity. Did retained earnings in­crease or decrease from 2015 to 2016? Also state how much in dividends the company paid outin 2016.
6. How much cash did Nestle have at the beginning of the most recent year? How much cashdid Nestle have at the end of the year? Why is it important that a firm maintains a healthy cash balance?

Answer rating: 100% (QA)

a Answer The one item I would pick from the companys Consolidated Income Statement to increase year after year would be Sales The reason behind choosing this item is that when the Sales increases year ... View the full answer