Derek Yee, CFA, is preparing to forecast cash fl ow for Groupe Danone (FP: BN) as an input into his valuation model. He has asked you to evaluate the historical cash flow statement of Groupe Danone, which is presented in Exhibit 12 . Groupe Danone prepares its fi nancial statements in conformity with IFRS. Note that Groupe Danone presents the most recent period on the right.

Yee would like answers to the following questions:
• What are the major sources of cash for Groupe Danone?
• What are the major uses of cash for Groupe Danone?
• What is the relationship between net income and cash flow from operating activities?
• Is cash flow from operating activities sufficient to cover capital expenditures?
• Other than capital expenditures, is cash being used or generated in investing activities?
• What types of financing cash flows does Groupe Danone have?

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EXHIBIT 12 Groupe Danone Consolidated Financial Statements Consolidated Statements of Cash Flows (in Millions) Years Ended 31 December Net income attributable to the Group Net income attributable to minority interests Net income from discontinued operations Share of profits of associates Depreciation and amortization Dividends received from associates Other flows with impact on cash Other flows with no impact on cash Cash flows provided by operating activities, excluding changes in net working capital (Increase) decrease in inventories (Increase) decrease in trade accounts receivable 2008 1,313 178 (269) (62) 525 29 (113) 93 1,699 3 (74) 2009 1,361 160 77 549 174 (157) (93) 2,092 37 (112)