Common-size statement analysis A common-size income statement for Creek Enterprises' 2014 operations follows Using the firm's 2015 income statement develop the 2015 common-size income statement and compare it to the 2014 statement. Which areas require further analysis and investigation? Less operating expenses Selling expense % 12.8 % General and administrative expenses 6.5 0.5 Lease expense 3.6 23.4 % 10.0 % 2.1 Depreciation expense Total operating expense Operating profits Less: Interest expense Net profits before taxes Less: Taxes (rate = 40%) Net profits after taxes Less: Preferred stock dividends % 7.9 % 3.2 % 4.7 % 0.2 % Earnings available for common stockholders 4.5 % Enter any number in the edit fields and then click Check Answer. 1 part Clear All Check Answer 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. OC. 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. Click to select your answer(s) and then click Check Answer. All parts showing Clear All Data Table -X Coments into a spreadsheet.) Creek Enterprises Income Statement for the Year Ended December 31, 2014 Sales revenue ($34,989,000) 100.0 % Less: Cost of goods sold 66.6 Gross profits 33.4 % Less: Operating expenses Selling expense 12.8 % General and administrative expenses 6.5 Lease expense 0.5 Depreciation expense Total operating expense 23.4 Operating profits 10.0 % Less: Interest expense 2.1 Net profits before taxes 7.9 % Less: Taxes (rate = 40%) 3.2 Net profits after taxes 4.7 % Less: Preferred stock dividends 0.2 Earnings available for common stockholders 4.5 % 3.6 Print Done . Data Table To a spreadsheet.) Creek Enterprises Income Statement for the Year Ended December 31, 2015 Sales revenue $29,976,000 Less: Cost of goods sold 21,041,000 Gross profits $8,935,000 Less: Operating expenses Selling expense $3,000,000 General and administrative expenses 1,833,000 Lease expense 224,000 Depreciation expense 983,000 Total operating expense 6,042,000 Operating profits $2,893,000 Less: Interest expense 1,047,000 Net profits before taxes $1,846,000 Less: Taxes (rate = 40%) 738,400 Net profits after taxes $1,107,600 Less: Preferred stock dividends 79,000 Earnings available for common stockholders $1,028,600 Print Done