P3-20 (similar to) 6.3% Common-size statement analysis A common-size income statement for Creek Enterprises' 2014 operations follows Using the firm's 2015 incom 2014 statement. Which areas require further analysis and investigation? Less: Operating expenses Da TE Selling expense 10.1 % 12.5% General and administrative expenses 6.0 6.4 0.7 Lease expense (Click on the 0.4 into a sprea 3.4 Depreciation expense 3.7 Creek E 20.2 23.0 Total operating expense Sales re 9.7 % 10.8 % Less: Cc Operating profits Gross pr 3.4 2.1 Less: Interest expense Less: OF 8.7 % Sell Net profits before taxes 25 Gen Less: Taxes (rate = 40%) Leas 5.2 % Net profits after taxes Dep 0.41 0.2 Less: Preferred stock dividends Operatin 5.0 % Less: Int Earnings available for common stockholders Net prof Provide your evaluation based on the common-size income statements: (Select all the choices that apply.) Less: Ta Net prof Less: Pr A. Operating expenses have decreased as a percentage of sales, this appears favorable unless this decline has contributed towa Eaming B. Selling expense has increased due to the increase in cost of goods sold. C. The level of interest as a percentage of sales has increased significantly; this suggests that the firm has too much debt, D. Sales have declined and cost of goods sold has increased as a percentage of sales, probably due to a loss of productive officia E. Further analysis should be directed at the increased cost of goods sold and the high debt level. 3.5 3.8 % 3.4 % Click to select your answer(s) and then click Check Answer. Clear All atement analysis A common-size income statement for Creek Enterprises' 2014 operations follows Using the firm's 2015 income statement deve which al * Data Table spensa i Data Table histrati nse (Click on the icon located on contents into a spreadsheet.) ense nse exes 40% (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 Income Statement for the Year Ended December 31, 2015 Sales revenue $30,011,000 Less: Cost of goods sold 21.030,000 Gross profits $8.981,000 Less: Operating expenses Selling expense $3,027.000 General and administrative expenses 1,803,000 Lease expense 196,000 Depreciation expense 1,033,000 Total operating expense 6,059,000 Operating profits $2,922,000 Less: Interest expense 1,030,000 Net profits before taxes $1,892,000 Less: Taxes (rate=40%) 756,800 Net profits after taxes $1,135,200 Less: Preferred stock dividends 112,000 Earnings available for common stockholders $1,023,200 es k div Creek Enterprises Income Sales revenue ($35,007,000 Less: Cost of goods sold Gross profits Less: Operating expenses Selling expense General and administrativ Lease expense Depreciation expense Total operating expens Operating profits Less: Interest expense Net profits before taxes Less: Taxes (rate=40%) Net profits after taxes Less: Preferred stock dividends Eamings available for common or col tion pens rise he fa intere declin Print Done sis answer(s) and then click Check Answer. Clear All Question Help 2014 operations follows . Using the firm's 2015 income statement develop the 2015 common-size income statement and compare it to the i Data Table below in order to copy its contents Hecember 31, 2015 $30,011,000 21,030,000 $8,981,000 $3,027.000 1,803,000 196,000 1,033,000 (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 Income Statement for the Year Ended December 31, 2014 Sales revenue ($35,007,000) 100.0 % Less: Cost of goods sold 66.2 Gross profits 33.8 % Less: Operating expenses Selling expense 12.5 % General and administrative expenses 6.4 Lease expense 0.4 Depreciation expense 3.7 Total operating expense 23.0 Operating profits 10.8 % Less: Interest expense 2.1 Net profits before taxes 8.7 % Less: Taxes (rate=40%) 3.5 Net profits after taxes 5.2 % 0.2 Less: Preferred stock dividends Earnings available for common stockholders 5.0 % 6,059,000 $2,922,000 1,030,000 $1,892,000 756,800 $1,135,200 112,000 $1,023,200 he fa Print Done Clear All Final Check 23.0 9.7% 6.3% 0.4 0.2 ung profits 10.8% Less: Interont expenso 3.4 2.1 Net profits before taxes 8.7% Less: Taxes (rate = 40%) 2,5 3,5 Net profits after taxes 3.8 % 5.2% Less: Preferred stock dividends Earnings available for common stockholders 5.0 % Provide your evaluation based on the common-size income statements: (Select all the choices that apply.) A. Operating expenses have decreased as a percentage of sales: this appears favorable unless this decline has contributed toward the fall in sales B. Selling expense has increased due to the increase in cost of goods sold, C. The level of interest as a percentage of sales has increased significantly, this suggests that the firm has too much debt | D. Sales have declined and cost of goods sold has increased as a percentage of sales, probably due to a loss of productive efficiency. E. Further analysis should be directed at the increased cost of goods sold and the high debt level 3.4 % . Click to select your answer(s) and then click Check Answer. All parts showing Clear All P3-20 (similar to) 6.3% Common-size statement analysis A common-size income statement for Creek Enterprises' 2014 operations follows Using the firm's 2015 incom 2014 statement. Which areas require further analysis and investigation? Less: Operating expenses Da TE Selling expense 10.1 % 12.5% General and administrative expenses 6.0 6.4 0.7 Lease expense (Click on the 0.4 into a sprea 3.4 Depreciation expense 3.7 Creek E 20.2 23.0 Total operating expense Sales re 9.7 % 10.8 % Less: Cc Operating profits Gross pr 3.4 2.1 Less: Interest expense Less: OF 8.7 % Sell Net profits before taxes 25 Gen Less: Taxes (rate = 40%) Leas 5.2 % Net profits after taxes Dep 0.41 0.2 Less: Preferred stock dividends Operatin 5.0 % Less: Int Earnings available for common stockholders Net prof Provide your evaluation based on the common-size income statements: (Select all the choices that apply.) Less: Ta Net prof Less: Pr A. Operating expenses have decreased as a percentage of sales, this appears favorable unless this decline has contributed towa Eaming B. Selling expense has increased due to the increase in cost of goods sold. C. The level of interest as a percentage of sales has increased significantly; this suggests that the firm has too much debt, D. Sales have declined and cost of goods sold has increased as a percentage of sales, probably due to a loss of productive officia E. Further analysis should be directed at the increased cost of goods sold and the high debt level. 3.5 3.8 % 3.4 % Click to select your answer(s) and then click Check Answer. Clear All atement analysis A common-size income statement for Creek Enterprises' 2014 operations follows Using the firm's 2015 income statement deve which al * Data Table spensa i Data Table histrati nse (Click on the icon located on contents into a spreadsheet.) ense nse exes 40% (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 Income Statement for the Year Ended December 31, 2015 Sales revenue $30,011,000 Less: Cost of goods sold 21.030,000 Gross profits $8.981,000 Less: Operating expenses Selling expense $3,027.000 General and administrative expenses 1,803,000 Lease expense 196,000 Depreciation expense 1,033,000 Total operating expense 6,059,000 Operating profits $2,922,000 Less: Interest expense 1,030,000 Net profits before taxes $1,892,000 Less: Taxes (rate=40%) 756,800 Net profits after taxes $1,135,200 Less: Preferred stock dividends 112,000 Earnings available for common stockholders $1,023,200 es k div Creek Enterprises Income Sales revenue ($35,007,000 Less: Cost of goods sold Gross profits Less: Operating expenses Selling expense General and administrativ Lease expense Depreciation expense Total operating expens Operating profits Less: Interest expense Net profits before taxes Less: Taxes (rate=40%) Net profits after taxes Less: Preferred stock dividends Eamings available for common or col tion pens rise he fa intere declin Print Done sis answer(s) and then click Check Answer. Clear All Question Help 2014 operations follows . Using the firm's 2015 income statement develop the 2015 common-size income statement and compare it to the i Data Table below in order to copy its contents Hecember 31, 2015 $30,011,000 21,030,000 $8,981,000 $3,027.000 1,803,000 196,000 1,033,000 (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 Income Statement for the Year Ended December 31, 2014 Sales revenue ($35,007,000) 100.0 % Less: Cost of goods sold 66.2 Gross profits 33.8 % Less: Operating expenses Selling expense 12.5 % General and administrative expenses 6.4 Lease expense 0.4 Depreciation expense 3.7 Total operating expense 23.0 Operating profits 10.8 % Less: Interest expense 2.1 Net profits before taxes 8.7 % Less: Taxes (rate=40%) 3.5 Net profits after taxes 5.2 % 0.2 Less: Preferred stock dividends Earnings available for common stockholders 5.0 % 6,059,000 $2,922,000 1,030,000 $1,892,000 756,800 $1,135,200 112,000 $1,023,200 he fa Print Done Clear All Final Check 23.0 9.7% 6.3% 0.4 0.2 ung profits 10.8% Less: Interont expenso 3.4 2.1 Net profits before taxes 8.7% Less: Taxes (rate = 40%) 2,5 3,5 Net profits after taxes 3.8 % 5.2% Less: Preferred stock dividends Earnings available for common stockholders 5.0 % Provide your evaluation based on the common-size income statements: (Select all the choices that apply.) A. Operating expenses have decreased as a percentage of sales: this appears favorable unless this decline has contributed toward the fall in sales B. Selling expense has increased due to the increase in cost of goods sold, C. The level of interest as a percentage of sales has increased significantly, this suggests that the firm has too much debt | D. Sales have declined and cost of goods sold has increased as a percentage of sales, probably due to a loss of productive efficiency. E. Further analysis should be directed at the increased cost of goods sold and the high debt level 3.4 % . Click to select your answer(s) and then click Check Answer. All parts showing Clear All