(Click the icon here in order to copy the contents of the data table below into a spreadsheet.) Creek Enterprises Income Statement for the Year Ended December 31, 2022 $30,009,000 Sales revenue Less: Cost of goods sold 20,953,000 Gross profits $9,056,000 Less: Operating expenses Selling expense $2,961,000 General and administrative expenses 1,757,000 Lease expense 185,000 Depreciation expense 1,021,000 Total operating expense 5,924,000 Operating profits Less: Interest expense $3,132,000 1,028,000 Net profits before taxes Less: Taxes (rate = 21%) Net profits after taxes Less: Preferred stock dividends Earnings available for common stockholders $2,104,000 441,840 $1,662,160 109,650 $1,552,510 Creek Enterprises Balance Sheet December 31, 2022 Assets Liabilities and Stockholders' Equity Cash Current assets Marketable securities Current liabilities $969,000 Accounts payable $8,030,000 3,021,000 Notes payable 8,007,000 Accounts receivable 12,011,000 Accruals 522,000 Inventories 7,504,000 Total current liabilities $16,559,000 Total current assets $23,505,000 Long-term debt (includes financial leases)** $19,394,000 Gross fixed assets (at cost)* Stockholders' equity Land and buildings $11,030,000 Preferred stock (25,800 shares, $4.25 dividend) $2,485,000 Machinery and equipment 20,526,000 Common stock (1.12 million Furniture and fixtures 7,967,000 shares at $5.00 par) 5,600,000 Gross fixed assets $39,523,000 Paid-in capital in excess of par value 4,019,000 Less: Accumulated depreciation 13,015,000 Retained earnings 1,956,000 Net fixed assets $26,508,000 Total stockholders' equity $14,060,000 Total liabilities and Total assets $50,013,000 stockholders' equity $50,013,000 *The firm has a 4-year lease requiring annual beginning-of-year payments of $185,000. Three years of the lease have yet to run. **Required annual principal payments are $764,000. H Debt analysis Springfield Bank is evaluating Creek Enterprises, which has requested a $4,210,000 loan, to assess the firm's financial leverage and financial risk. On the basis of the debt ratios for Creek, along with the industry averages and Creek's recent financial statements, evaluate and recommend appropriate action on the loan request. Industry averages Creek Enterprises Income Statement: Debt ratio 0.48 Times interest eamed ratio. 7.36 Creek Enterprises Balance Sheet: Fixed-payment coverage ratio 2.07 Creek Enterprises's debt ratio is (Round to two decimal places.) Creek Enterprises's times interest earned ratio is (Round to two decimal places.) Creek Enterprises's fixed-payment coverage ratio is (Round to two decimal places.) Complete the following summary of ratios and compare Debt ratio Times interest earned ratio Fixed-payment coverage ratio Creek Do you agree or disagree with the decision below? Creek Enterprises's ratios vs. the industry average: (Round to two decimal places.). Industry 0.48 7.36 2.07 Do you agree or disagree with the decision below? Because Creek Enterprises has a much higher degree of indebtedness and much lower ability to service debt than the average firm in the industry, the loan should be rejected. (Select from the drop-down menu.)