Exhibit 3.36 presents a statement of cash flows for Starbucks for 2006, 2007, and 2008. This statement is an expanded version of the statement of cash flows for Starbucks shown in Exhibit 1.28.

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 relation between 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 in Chapter 1 (Integrative Case 1.1). Compute the amount of EBITDA for 2006, 2007, and 2008.

g. Discuss the relationships 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 in Chapter 1 (Integrative Case 1.1) shows depreciation and amortization expense as follows:

However, the statement of cash flows shows addbacks for depreciation and amortization as follows:

Explain why the amount on the income statement differs from the amount on the statement of cash flows eachyear.

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2006 2007 2008 $387.2 $467.2 $549.3 2006 2007 2008 $491.2 $604.5 $412.6