Creek Enterprises' 2014 operations follows: Using the firm's 2015 income statement presented in Problem 3-18, develop the 2015 common-size income statement and compare it with the 2014 statement. Which areas require further analysis and investigation?

Transcribed Image Text:

Common-Size Income Statement for the Year Ended December 31, 2014 Sales revenue ($35,000,000) Less: Cost of goods sold 100.0% Gross profits Less: Operating expenses Selling expense General and administrative expenses 12.7% 6.3 0.6 Depreciation expense Total operating expense Less: Interest expense Less: Taxes (rate-40%) Less: Preferred stock dividends Operating profits Net profits before taxes Net profits after taxes Earnings available for common stockholders 10.9% 9.4% 5.6% 5% 0.1 -