Creek Enterprises Income Statement for the Year Ended December 31, 2022 Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Selling expense General and administrative expenses Lease expense Depreciation 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 $30,000,000 21,000,000 $ 9,000,000 $3,000,000 1,800,000 200,000 1,000,000 $3,000,000 1,000,000 $ 2,000,000 420,000 $ 1,580,000 100,000 $1,480,000
Creek Enterprises Income Statement for the Year Ended December 31, 2022 Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Selling expense General and administrative expenses Lease expense Depreciation 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 $30,000,000 21,000,000 $ 9,000,000 $3,000,000 1,800,000 200,000 1,000,000 $3,000,000 1,000,000 $ 2,000,000 420,000 $ 1,580,000 100,000 $1,480,000
Creek Enterprises Income Statement for the Year Ended December 31, 2022 Sales revenue Less: Cost of goods sold Gross profits Less: Operating expenses Selling expense General and administrative expenses Lease expense Depreciation 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 $30,000,000 21,000,000 $ 9,000,000 $3,000,000 1,800,000 200,000 1,000,000 $3,000,000 1,000,000 $ 2,000,000 420,000 $ 1,580,000 100,000 $1,480,000
Common-size statement analysis A common-size income statement for Creek Enterprises’ 2021 operations follows. Using the firm’s 2022 income statement, develop the 2022 common-size income statement and compare it with the 2021 common-size statement. Which areas require further analysis and investigation?
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