Analyze the effects of the inventory method on the balance sheet

A company’s annual report usually will identify the inventory method used. Knowing that, you can analyze the effects of the inventory method on the income statement and balance sheet.

1. From Darden Restaurants’ homepage, choose the Numbers.

2. Choose Financial Information.

3. Choose Annual Report & Financials.

4. Choose Annual Report 2002—HTML version.

5. Click on Financial Highlights under the Table of Contents.

Answer the following questions based on the 2002 Annual Report.

(a) At Darden’s fiscal year-end, what was the net inventory on the balance sheet?

(b) How has this changed from the previous fiscal year-end?

(c) What inventory method does Darden use?

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