Question: There is a growing discrepancy between the companys Cash Flow from Operating Activities and its reported Net Income. Summed over the last three years, total

There is a growing discrepancy between the companys Cash Flow from Operating Activities and its reported Net Income. Summed over the last three years, total Net Income is about $10 billion while the total Cash Flow from Operations is double this amount, about $20 million! The company must be overstating its expenses and reserves/allowances.

After reviewing Starbucks' 2018 10K, comment on this statement. What are the main reasons for the above-mentioned discrepancy? Do you agree that the discrepancy represents a buildup of reserves? In general, should we expect Net Income and Cash Flow from Operations Activities to converge to a very similar cumulative number in the long run (that is, the discrepancy between the two would become small)?

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