Required: Discuss the relations between net income and cash flow from operations and among cash flows from operating, investing, and financing activities for the firm over the three year period. Identify characteristics of coca cola's cash flows that you would expect for a mature company.

Cash flow from operations Cash flow from investing Cash flow from financing One of these firms is eBay, an (3,491) 1,657 (1,654) online retailer with a three-year growth in sales of 3373%, and other is TJx Companies, Inc., a specialty retail store with a three year growth in sales of 393% Identify each firm and explain your reasoning. Problems and Cases 3.18 Interpreting the State pany statement of cash flows for Coca-Cola for three years ment of Cash Flows. The Coca-Cola Com- (Coca-Cola) manufactures and markets a variety of beverages. Exhibit 3.16 presents a Exhibit 3.16 The Coca-Cola Company Statement of Cash Flows (amounts in millions) (Problem 3.18) Year Ended December 31, Year 3 Year 2 Year 1 OPERATING ACTIVITIES Net income Depreciation and amortization Stock-based compensation expense Deferred income taxes Equity income or loss, net of dividends Foreign currency adjustments Gains on sales of assets, including bottling interests Other operating charges Other items Net change in operating assets and liabilities Net Cash Provided by Operating Activities $5,807 $5,981 5,080 1,163 313 109 (452) 938 324 (35) 124 1,128 (130) 153 $ 7,571 (244) 166 (303) 159 233 (615) $ 5,957 $ 7,150 INVESTING ACTIVITIES Acquisitions and investments, principally beverage and bottling companies and trademarks $(759) $(5,653) (901) (240) Purchases of other investments Proceeds from disposals of bottling companies and other investments 479 Purchases of property, plant, and equipment (1,968) (1,648) (1,407) Exhibit 3.16 (Continued) Proceeds from disposals of property, plant, and equipment 129 239 112 Other investing activities Net Cash Used in Investing Activities FINANCING ACTIVITIES Issuances of debt Payments of debt Issuances of stock Purchases of stock for treasury Dividends Net Cash Provided by (Used in) Financing Activities Effect of exchange rate changes on cash and cash equivalents ASH AND CASH EQUIVALENTS let Increase (Decrease) During the Year alance at beginning of year alance at End of Year 5(2363) 5(6.719) $(0700 $ 4,337 $9,979 617 (5,638) (2,021) 148 (2,416) (2911) $13,985) 973 $(6583) $ 65 586 (1,079) (3,521) (615) 1,619 (1,838) 3,149) 249 4,093 $ 4,701 $ 608 1,653 $(2,261) 4,701 4,093 $2440 2,440 rce The Coca-Cola Company, Form 10-K for the Fiscal Year Ended 2008