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Posted by: Homeworkhelp
Price Quoted by Student: $8
Posted On: 2016-03-23 02:02:54
 
Question

A common-size income statement for Creek Enterprises’ 2014

 

Part II  P3-20 Common-size statement analysis

 

P3-20 A common-size income statement for Creek Enterprises’ 2014 operations follows. Using the firm’s 2015 income statement presented in Problem 3–18, develop the 2015 common-size income statement and compare it with the 2014 statement.

Which areas require further analysis and investigation?

 

Creek Enterprises Common-Size Income Statement           for the Year Ended

December 31, 2014

Creek Enterprises

Income Statement for the Year Ended

December 31, 2015

Sales revenue ($35,000,000)                                    100.0%

Sales Revenue $30,000,000

Less: Cost of goods sold                                             65.9

Less: Cost of goods sold 21,000,000

        Gross profits                                            34.1%

Gross profits  $ 9,000,000

Less: Operating expenses

Less: Operating expenses

        Selling expense                                              12.7%

          Selling expense $ 3,000,000

        General and administrative expenses                        6.3

          General and administrative expenses 1,800,000

        Lease expense                                      0.6

 

          Lease expense 200,000

        Depreciation expense                                      3.6

 

Depreciation expense  1,000,000

Total operating expense                                                 23.2

    Total operating expense $6,000,000  

Operating profits                                                      10.9%

       Operating profits  $ 3,000,000

Less: Interest expense                                                1.5 

Less: Interest expense  1,000,000

Net profits before taxes                                        9.4%

        Net profits before taxes $ 2,000,000

Less: Taxes (rate 5 40%)                            3.8

 Less: Taxes (rate 5 40%) 800,000

Net profits after taxes                                      5.6%

       Net profits after taxes $ 1,200,000

Less: Preferred stock dividends                                       0.1

Less: Preferred stock dividends   100,000

Earnings available for common stockholders              5.5%

       Earnings available for common stockholders$ 1,100,000

 

 

 

TUTORIAL PREVIEW

Creek Enterprises

Common-Size Income Statement

For the Years Ended December 31, 2014, & 2015

2014

2015

Sales Revenue ($35,000,000)

100%

100.0%

Less: Cost of Goods Sold

65.9%

70.0%

 


Solutions
Creek Enterprises 
Price $8
Attachment 1: P3-20 Creek Enterprises.xlsx
Solution Posted By: Homeworkhelp    Posted on: 23-03-2016