Notes to the cash flow statement

The cash flow statement provides an explanation of the changes in cash and cash equivalents. It is prepared on the basis of a comparison of the balance sheets as at 1 January and 31 December. Changes that do not involve cash flows, such as changes in exchange rates, amortization, depreciation, impairment losses and transfers to other balance sheet items, are eliminated.

Changes in working capital due to the acquisition or disposal of consolidated companies are included under Investing activities.

Most of the changes in the cash flow statement can be traced back to the detailed statements of changes for the balance sheet items concerned. For those balance sheet items for which no detailed statement of changes is included, the table below shows the link between the change according to the balance sheet and the change according to the cash flow statement:

Change in operating working capital

 
2016
2015
Operating working capital
  
   
Balance at 1 January
1,808
1,948
Balance at 31 December
1,928
1,808
Balance sheet change
120
(140)
   
Adjustments:
  
- Exchange differences
(78)
(127)
- Changes in consolidation (including acquisitions and disposals)
(4)
285
- Reclassification from / to held for sale
(3)
3
- Transfers / non cash value adjustments
23
31
Total change in operating working capital according to the cash flow statement
58
52

In 2016, the operating working capital of continuing operations before reclassification to held for sale was €1,928 million, which amounts to 23.9% of annualized fourth quarter net sales (2015: 23.5%). Besides the business impact this increase was due to an exchange rate effect.