The Coca-Cola Company (Coca-Cola), like PepsiCo, manufactures and markets a variety of beverages. Exhibit 3.18 presents a statement of cash flows for Coca-Cola for three years.
Exhibit 3.18
The Coca-Cola Company
Statement of Cash Flows
(Amounts in millions)
(Problem 3.15)

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?

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Year Ended December 31 Year 3 Year 2 Year 1 OPERATING ACTIVITIES Net income Depredation and amortization Stock-based compen sation 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 Net Cash Provided by Operating Activities 5,807 1,228 266 (360) 1,128 (42) (130) 209 153 (688) $7,571 5,981 5,080 938 324 (35) 124 52 (303) 159 233 (615) 5 7,150 $5,957 1,163 313 109 (452) 244 166 and liabilities INVESTING ACTIVITIES Acquisitions and investments, principally beverage and botding companies and trademarks Purchases of other investments Proceeds from disposals of bottling companies and other $ (759 $(5,653) (99) (901) (82) (240) investments 479 448 640 Purchases of property, plant, and equipment Proceeds from disposals of property, plant, and equipment Other investing activities Net Cash Used in Investing Activities (1,968) 129 (1,648) 1,407) 112 (62) $(6,719) (1,700) 239 $(2,363) 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 $4,337 (4308) 586 (1,079) (3,521) $(3,985) $ (615) 9,979617 (5,638) (2021) 148 (1,838) (2416 1,619 (2911) (3,149) $ 973 5 249 $(6,583) 65 CASH AND CASH EQUIVALENTS Net Increase (Decrease) During the Year Balance at beginning of year Balance at End of Year $ 608 SI 3 S(2.261) 4,093 24404701 $2440 $4,093 Source The Coca-Cola Company, Form 10* for the Fiscal Year Ended 2008.