Interpreting the statement of cash flows. Exhibit 13.18 presents a statement of cash flows for Campbell Soup Company for three recent years. Campbell Soup Company is in the consumer foods industry, a relatively mature industry in the United States.

a. Cash flow from operations each year approximately equals net income plus addbacks for depreciation, deferred taxes, and other. What is the likely explanation for this relation?

b. In the Investing section of Campbell's statement of cash flow, what are the indications that the company is in a relatively mature industry?

c. In the Financing section of Campbell's statement of cash flows, what are the indications that the company is in a relatively mature industry?

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CAMPBELL SOUP COMPANY EXHIBIT 13.18 Statement of Cash Flows (all dollar amounts in millions) Problem 181 Year 6 Year 7 Year 8 OPERATIONS Net Income .... Depreciation... Deferred Income Taxes Other Addbacks (Increase) in Accounts Receivable (Increase) Decrease in inventones (Increase) in Prepayments.. $223 127 29 21 $ 274 171 31 11 (19) (55) 13 (13) 6 (7) (11) (40) 27 72 Increase (Decrease) in Other Current Liabilities 29 (2) $ 443 $ 469 Increase in Accounts Payable... Cash Flow from Operations.... INVESTING Sale of Property, Plant, and Equipment.. Sale of Marketable Securities Acquisition of Property, Plant, and Equipment. Acquisition of Marketable Securities Acquisition of Investments in Securities Other Investing Transactions... Cash Flow from Investing FINANCING Increase in Short term Borrowing. Increase in Long-term Borrowing Issue of Common Stock .. Decrease in Short-term Borrowing Decrease in Long-term Borrowing Acquisition of Common Stock Dividends... Cash Flow from Financing Change in Cash Cash, Beginning of Year Cash, End of Year $ 30 328 (275) (472) (5) $(394) , R"+S $ 41 319 (250) (245) (680) (70) (472) (48) $(408) $(476) $220 4 (3) [168] (84) $ (31) $ 18 (92) $ (83) 155 $173 173 $ 145 $ (28) 19 (5) (106) (28) (103) $ (531 $ (591 145 $ 86 $ 56 103