Using cash flow information—The Coca-Cola Company Following are comparative statements of cash flows, as reported by The Coca-Cola Company in its 2008 annual report:
THE COCA-COLA COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows Year Ended December 31 (in millions) | |||
| 2008 | 2007 | 2006 |
Operating Activities (details omitted) |
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Net cash provided by operating activities | $ 7,571 | $ 7,150 | $ 5,957 |
Investing Activities |
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Acquisitions and investments, principally beverage |
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and bottling companies and trademarks | (759) | (5,653) | (901) |
Purchases of other investments | (240) | (99) | (82) |
Proceeds from disposals of bottling companies |
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and other investments | 479 | 448 | 640 |
Purchases of property, plant, and equipment | (1,968) | (1,648) | (1,407) |
Proceeds from disposals of property, plant, |
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and equipment | 129 | 239 | 112 |
Other investing activities | (4) | (6) | (62) |
Net cash used in investing activities | (2,363) | (6,719) | (1,700) |
Financing Activities |
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Issuances of debt | 4,337 | 9,979 | 617 |
Payments of debt | (4,308) | (5,638) | (2,021) |
Issuances of stock | 586 | 1,619 | 148 |
Purchases of stock for treasury | (1,079) | (1,838) | (2,416) |
Dividends | (3,521) | (3,149) | (2,911) |
Net cash provided by (used in) financing activities | (3,985) | 973 | $ (6,583) |
Effect of Exchange Rate Changes on |
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Cash and Cash Equivalents | (615) | 249 | 65 |
Cash and Cash Equivalents |
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Net increase (decrease) during the year | 608 | 1,653 | (2,261) |
Balance at beginning of the year | 4,093 | 2,440 | 4,701 |
Balance at end of year | $ 4,701 | $ 4,093 | $ 2,440 |
Required:
a. Briefly review the consolidated statements of cash flows, and then provide an overall evaluation of the “big picture” during the three years presented for Coca-Cola. Have operating cash flows been sufficient to meet investing needs and to pay dividends?
b. Were there significant changes to any of the specific line-item details that you think would require further explanation or analysis?
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