Interpreting the statement of cash flows. Exhibit 15.19 presents a statement of cash flows for Canned Soup Company for three recent years Canned 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 add backs for depreciation, deferred taxes, and other. What is the likely explanation for this relation?
b. In the Investing section of Canned€™s statement of cash flows, what are the indications that the company is in a relatively mature industry?
c. In the Financing section of Canned€™s statement of cash flows, what are the indications that the company is in a relatively matureindustry?

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Canned Soup Company Statement of Cash Flows (all dollar amounts in millions) (Problem 15) EXHIBIT 15.19 2009 2008 2007 OPERATIONS Net Income .. $ 274 $ 247 $ 223 Depreciation 171 145 127 Deferred Income Taxes 31 46 29 Other Addbacks 11 34 21 (40) (13) (11) (Increase) in Accounts Receivable (55) (19) (Increase) Decrease in Inventories 13 (Increase) in Prepayments ... (40) (7) Increase in Accounts Payable Increase (Decrease) in Other Current Liabilities . Cash Flow from Operations. 72 53 27 (1) $ 469 2 $ 463 29 $ 443 INVESTING $ 41 $ 21 Sale of Property, Plant, and Equipment $ 30 Sale of Marketable Securities .... 535 319 328 Acquisition of Property, Plant, and Equipment (245) (250) (275) Acquisition of Marketable Securities .... Acquisition of Investments in Securities Other Investing Transactions Cash Flow from Investing .. (70) (680) (472) (472) (48) $(475) (34) S(408) (5) S(394) FINANCING $ 86 Increase in Short-Term Borrowing . $ 220 Increase in Long-Term Borrowing Issue of Common Stock .... Decrease in Short-Term Borrowing Decrease in Long-Term Borrowing 103 29 2 4. (5) (3) (106) (27) (168) Acquisition of Common Stock .. (28) Dividends ... (103) $ (53) $ (59) (92) $ (83) $ (28) (84 $ (31) $ 18 Cash Flow from Financing Change in Cash Cash, Beginning of Year Cash, End of Year .. 145 $ 86 173 155 $ 145 $ 173