Debt analysis Springfield Bank is evaluating Creek Enterprises which has requested a 54,160 000 loanto assess the firm's financy 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 recomme Cancel bnate action on the loan request 202 Industry averages Debt ratio Crook Enterprises Income Statement 0.50 Times interest earned ratio 738 Fixed payment coverage ratio Creek Enterprises Balance Sheet ! Crook 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 Creek Enterprises's ratios vs the industry average: (Round to two decimal places) Creek Industry Debt ratio 050 Times interest earned ratio 738 Faced payment coverage ratio 2.02 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) Enter your answer in each of the answer boxes. 0 Springfield e debt ratios id Data Table age and financial risk. On x propriate action on the loan View by Industri (Click on the icon located on the top-right corner of the data table below order to copy its contents arest earnedre mont coverage into a spreadsheet) rises's debt rati rises's times in rises's fixed-pal following sumi Creek Enterprises Income Statement for the Year Ended December 31, 2019 Sales revenue $30,046,000 Less Cost of goods sold 20,965,000 Gross profits $9,081,000 Less: Operating expenses Selling expense $3,031,000 General and administrative expenses 1,845,000 Lease expense 239,000 Depreciation expense 1,017,000 Total operating expense 6.132,000 Operating profits $2,949,000 Less Interest expense 986,000 Net profits before taxes $1,963,000 Less: Taxes (rate=21%) 412,230 Net profits after taxes $1,550,770 Less: Preferred stock dividends 91,500 Earnings available for common stockholders $1,459 270 10 terest earned ayment coverage ee or disagree w reek Enterprises Pustry, the loan should be (Seld Print Done answer in each dild die - al risk On on the loan View by IN rest eal iment cd ises's de rises's te rises's following (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet) Creek Enterprises Balance Sheet December 31, 2019 Assets Liabilities and Stockholders' Equity Current assets Current liabilities Cash $1,045 000 Accounts payable $7,960,000 Marketable securities 3,032.000 Notes payable 7,980 000 Accounts receivable 12,025,000 Accruals 503.000 Inventories 7.496.000 Total current liabilities $16,443000 Total current assets $23,598.000 Long-term debt (includes financial leases)" $19.951 500 Gross fixed assets (at cost)" Stockholders' equity Land and buildings $11,015,000 Preferred stock (24.400 shares, $3.75 dividend) 52,498,000 Machinery and equipment 20 519,000 Common stock (1.09 million Furniture and fixtures 7.979,000 shares at $4.75 par) 5,177 500 Gross fixed assets $39 513 000 Paid-in capital in excess of par value 3.957,000 Less: Accumulated depreciation 13.036.000 Retained earnings 2,048.000 Net foxed assets $26.477 000 Total stockholders' equity $13.680,500 Total liabilities and Total assets $50,075 000 stockholders' equity $50,075,000 *The firm has a 4 year financial lease requiring annual beginning of year payments of $239,000 Three years lo terest eal ayment ca De or disad reek Enter should be