A common-size income statement for Creek Enterprises' 2018 Using the firms' 2019 income statement below, develop the Common-size income statement and compare it to the 2018 statement. Which areas require further analysis and investigation?'

Complete the common-size income statement for the year ending December 31,2019 and compare it to the common-size income statement for the year ending December2018:

Creek Enterprises Income Statement for the Year Ended December 31, 2019 Sales revenue $29,981,000 Less: Cost of goods sold 20,989,000 Gross profits $8,992,000 Less: Operating expenses Selling expense $2,955,000 General and administrative expenses 1,819,000 Lease expense 184,000 Depreciation expense 980,000 Total operating expense 5,938,000 Operating profits $3,054,000 Less: Interest expense 1,039,000 Net profits before taxes $2,015,000 Less: Taxes (rate=40%) 806,000 Net profits after taxes $1,209,000 Less: Preferred stock dividends 140,000 Earnings available for common stockholders $1,069,000

(Round to one decimal place.)

Creek Enterprises
Common-Size Income Statement
for the Years Ended December 31, 2018 and December 2019
	2019				2018
Sales revenue			=	%			100.0	%
Less: Cost of goods sold							65.5
Gross profits				%			34.5	%
Less: Operating expenses
Selling expense		%			13.0	%
General and administrative expenses					6.3
Lease expense					0.5
Depreciation expense					3.6
Total operating expense							23.4
Operating profits				%			11.1	%
Less: Interest expense							1.4
Net profits before taxes				%			9.7	%
Less: Taxes (rate = 40%)							3.9
Net profits after taxes				%			5.8	%
Less: Preferred stock dividends							0.2
Earnings available for common stockholders				%			5.6	%

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