Notes to the financial statements
27 Notes to the cash flow statements
(a) Reconciliation of operating profit to cash generated from operations
| Group 2008 £m |
Group 2007 £m |
Company 2008 £m |
Company 2007 £m |
|
|---|---|---|---|---|
| Operating profit | 530 | 520 | (4) | 6 |
| Adjustments for | ||||
| Depreciation expense | 463 | 479 | 2 | 2 |
| Amortisation expense | 18 | 21 | - | – |
| Profit on sale of properties | (7) | (7) | - | (5) |
| Fair value gain on other financial asset | (22) | – | - | – |
| Profit on part disposal of Sainsbury’s Bank | - | (10) | - | (11) |
| Provision for diminution in value of investment | - | – | - | 6 |
| Foreign exchange differences | (2) | 6 | - | – |
| Share-based payments expense | 53 | 38 | - | – |
| Operating cash flows before changes in working capital | 1,033 | 1,047 | (2) | (2) |
| Changes in working capital | ||||
| Increase in inventories | (94) | (12) | - | – |
| Increase in current available-for-sale financial assets | - | (45) | - | – |
| (Increase)/decrease in trade and other receivables | (26) | (50) | 19 | 624 |
| Decrease in amounts due from Sainsbury’s Bank customers and other banks | - | 188 | - | – |
| Increase/(decrease) in trade and other payables | 96 | 314 | (141) | (788) |
| Decrease in amounts due to Sainsbury’s Bank customers and other banks | - | (198) | - | – |
| Decrease in provisions and other liabilities | (11) | (414) | (2) | – |
| Cash generated from operations | 998 | 830 | (126) | (166) |
(b) Cash and cash equivalents
For the purposes of the cash flow statements, cash and cash equivalents comprise the following:
| Group 2008 £m |
Group 2007 £m |
Company 2008 £m |
Company 2007 £m |
|
|---|---|---|---|---|
| Cash and cash equivalents | 719 | 1,128 | 324 | 523 |
| Bank overdrafts (note 20) | (118) | (363) | (88) | (259) |
| 601 | 765 | 236 | 264 |