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Please show how you got the percentages? I've been stuck on this problem for ages. Complete the common-size income statement for the year ending December
Please show how you got the percentages? I've been stuck on this problem for ages.
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 December 2018: (Roun 2018 100.0 % Creek Enterprises Common-Size Income Statement for the Years Ended December 31, 2018 and December 2019 2019 Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Selling expense General and administrative expenses 66.2 33.8 % 13.3 % 6.4 0.3 3.5 Lease expense 23.5 10.3 % 1.7 8.6 % Depreciation expense Total operating expense Operating profits Less: Interest expense Net profits before taxes Less: Taxes (rate = 21%) Net profits after taxes Less: Preferred stock dividends Earnings available for common stockholders 1.8 6.8 % 0.2 6.6 % Provide your evaluation based on the common-size income statements: (Select all the choices that apply.) A. Sales have declined and cost of goods sold has increased as a percentage of sales, probably due to a loss of productive efficiency. DB. Operating expenses have decreased as a percentage of sales; this appears favorable unless this decline has contributed toward the fall in sales I c. The level of interest as a percentage of sales has increased significantly; this suggests that the firm has too much debt. D. Selling expense has increased due to the increase in cost of goods sold. E. Further analysis should be directed at the increased cost of goods sold and the high debt level. Enter any number in the edit fields and then continue to the next question. 6.4 Creek Enterprises Income Statement for the Year Ended December 31, 2018 Sales revenue ($35,030,000) 100.0 % Less: Cost of goods sold 66.2 Gross profits 33.8 % Less: Operating expenses Selling expense 13.3 % General and administrative expenses Lease expense 0.3 Depreciation expense 3.5 Total operating expense 23.5 Operating profits 10.3 % Less: Interest expense 1.7 Net profits before taxes 8.6 % Less: Taxes (rate = 21%) 1.8 Net profits after taxes 6.8 % Less: Preferred stock dividends 0.2 Earnings available for common stockholders 6.6 % CP) into a spreadsheet.) Creek Enterprises Income Statement for the Year Ended December 31, 2019 Sales revenue $29,969,000 Less: Cost of goods sold 21,010,000 Gross profits $8,959,000 Less: Operating expenses Selling expense $3,029,000 General and administrative expenses 1,823,000 Lease expense 161,000 Depreciation expense 966,000 Total operating expense 5,979,000 Operating profits $2,980,000 Less: Interest expense 963,000 Net profits before taxes $2,017,000 Less: Taxes (rate = 21%) 423,570 Net profits after taxes $1,593,430 Less: Preferred stock dividends 118,000 Earnings available for common stockholders $1,475,430Step by Step Solution
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