Common-size statement analysis A common-size income statement for Creek Enterprises 2018 operations follows Using the firm's 2019 income statement develop the 2019 common-size income statement and compare 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 compared to the common-size income statement for the year ending December 2018: (Round to one decimal place) Certernes Creek Enterprises Common-Size Income Statement for the Years Ended December 31, 2018 and December 2019 2019 2018 % 100.0 % 65.5 % 34.5 % Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Selling expense General and administrative expenses Lease expense Depreciation expense % 13.3 % 6.4 0.3 3.6 General and administrative expenses 6.4 Lease expense 0.3 3.6 23.6 % 10.9 % 1.7 Depreciation expense Total operating expense Operating profits Less: Interest expense Net profits before taxes Less: Taxes (rate - 40%) Net profits after taxes Less: Preferred stock dividends Earnings available for common stockholders 9.2 % 3.7 % 5.5% 0.2 % 5.3 % ODOO Provide your evaluation based on the common-size income statements: (Select all the choices that apply.) A. Selling expense has increased due to the increase in cost of goods sold. B. The level of interest as a percentage of sales has increased significantly, this suggests that the firm has too much debt. C. Sales have declined and cost of goods sold has increased as a percentage of sales, probably due to a loss of productive efficiency D. Operating expenses have decreased as a percentage of sales; this appoars favorable unless this decline has contributed toward the fall in sales. E. Further analysis should be directed at the increased cost of goods sold and the high debt level. Enter Common-size statement analysis A common-size income statement for Creek Enterprises 2018 operations follows Using the firm's 2019 income statement develop the 2019 common-size income statement and compare 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 compared to the common-size income statement for the year ending December 2018: (Round to one decimal place) Certernes Creek Enterprises Common-Size Income Statement for the Years Ended December 31, 2018 and December 2019 2019 2018 % 100.0 % 65.5 % 34.5 % Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Selling expense General and administrative expenses Lease expense Depreciation expense % 13.3 % 6.4 0.3 3.6 General and administrative expenses 6.4 Lease expense 0.3 3.6 23.6 % 10.9 % 1.7 Depreciation expense Total operating expense Operating profits Less: Interest expense Net profits before taxes Less: Taxes (rate - 40%) Net profits after taxes Less: Preferred stock dividends Earnings available for common stockholders 9.2 % 3.7 % 5.5% 0.2 % 5.3 % ODOO Provide your evaluation based on the common-size income statements: (Select all the choices that apply.) A. Selling expense has increased due to the increase in cost of goods sold. B. The level of interest as a percentage of sales has increased significantly, this suggests that the firm has too much debt. C. Sales have declined and cost of goods sold has increased as a percentage of sales, probably due to a loss of productive efficiency D. Operating expenses have decreased as a percentage of sales; this appoars favorable unless this decline has contributed toward the fall in sales. E. Further analysis should be directed at the increased cost of goods sold and the high debt level. Enter
