Question: Determine the Cash Value of Nestlé S.A.

Purpose: It is simply good business practice to periodically determine the financial worth or cash value of your company. This exercise gives you practice determining the total worth of a company using several methods. Use data as given in the Cohesion Case or the data from the Nestlé website.

Instructions:

Step 1 Calculate the financial worth of Nestlé based on four methods:

i1) the net worth or stockholders' equity,

ii) the future value of Nestlé's earnings,

iii) the price-earnings ratio, and

iv) the outstanding shares method. In dollars, how much is Nestlé worth?

Step 2 Compare your analyses and conclusions with those of other students.