A common-size income statement for Creek Enterprises 2014
accounting teacherPart 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 | |
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p3-20_creek_enterprises.xlsx
