Refer to the statements of cash flows for the years ending 1994, 1993, and 1992 at the top of the next page. The statements were taken from the 1994 annual report of The Quaker Oats Company (dollars in millions). REQUIRED:

a. The company has expanded considerably over the past three years. Describe the nature of the expansion, and describe the primary sources of funding for the expansion. What else has this financing source enabled the company to do?

b. What earnings amounts would have been reported in 1993 and 1994 without the account¬ ing change and the restructuring charge? What were the cash flow effects of these two events?

c. What major financing activity has the company participated in over the last three years?

d. Comment in general on the solvency position of Quaker Oats.