Exhibit 3.34 presents a statement of cash flows for Starbucks for 2010, 2011, and 2012. This statement

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Exhibit 3.34 presents a statement of cash flows for Starbucks for 2010, 2011, and 2012. This statement is an expanded version of the statement of cash flows for Starbucks shown in Exhibit 1.28.
Exhibit 3.34 presents a statement of cash flows for Starbucks
Exhibit 3.34 presents a statement of cash flows for Starbucks

Required
a. Explain why equity in income of investees appears as a subtraction when net income is converted to cash flow from operations.
b. Compute the amount of cash received from investees as dividends each year. To answer this question, you need to refer to the income statement of Starbucks in Exhibit 1.27 in Chapter 1 (Integrative Case 1.1).
c. Explain why stock-based compensation appears as an addition to net income to compute cash flow from operations.
d. Discuss the relation between net income and cash flow from operations for each of the three years.
e. Discuss the relations among cash flows from operating, investing, and financing activities for each of the three years.
f. Refer to the income statement for Starbucks in Exhibit 1.27). Compute the amount of EBITDA for 2010, 2011, and 2012.
g. Discuss the relations among net income, non-working capital adjustments, working capital adjustments, operating cash flows, and EBITDA for the three years. Are the patterns similar or different? What are the primary determinants of the differences between the summary measures net income, operating cash flows, and EBITDA?
h. The income statement in Exhibit 1.27 shows depreciation and amortization expense as follows:
2012 2011 2010
$550.3 .........$523.3......... $510.4
However, the statement of cash flows shows add backs for depreciation and amortization as follows:
2012 2011 2010
$580.6 .......$550.0 ..........$540.8
Explain why the amount on the income statement differs from the amount on the statement of cash flows each year.

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