| EXERCISE: The Alpine Lemonade Co |
| Below are Balance Sheets and Income Statements for years 0 and 1 for the Alpine Lemonade Co. |
| Year 0 is the last historical year and Year 1 is a projection year (pro forma). |
| If the tax rate is 40%, what is Alpine's Free Cash Flow for year 1? |
| Balance Sheet | | t = 0 | | t = 1 |
| Cash | | 8 | | 27 |
| Accounts Receivable | | 70 | | 90 |
| Inventory | | 90 | | 110 |
| Current Assets | | 168 | | 227 |
| Fixed Assets | | 360 | | 415 |
| Accumulated Depreciation | | 80 | | 110 |
| Net Fixed Assets | | 280 | | 305 |
| Total Assets | | 448 | | 532 |
| Notes Payable Bank | | 30 | | 25 |
| Accounts Payable | | 20 | | 38 |
| Accrued Expenses | | 28 | | 44 |
| Current Liabilities | | 78 | | 107 |
| Long Term Debt | | 170 | | 185 |
| Total Liabilites | | 248 | | 292 |
| Common Stock | | 150 | | 160 |
| Retained Earnings | | 50 | | 80 |
| Net Worth | | 200 | | 240 |
| Liabilities & Net Worth | | 448 | | 532 |
| Income Statement | | t = 0 | | t = 1 |
| Sales | | 800 | | 1000 |
| Expenses | | 704 | | 880 |
| Operating Profit | | 96 | | 120 |
| Interest | | 16 | | 20 |
| Earnings Before Taxes | | 80 | | 100 |
| Provision for Tax | | 32 | | 40 |
| Net Income | | 48 | | 60 |
| Dividends | | 24 | | 30 |
| to Retained Earnings | | 24 | | 30 |