Det analysis Springfield Banks evaluating Creek Enterprises which has requested a $3.740.000 wan, to assess the firm's finance everage and financial risk on the basis of the debt ratios for Creek, song with the industry averages and Creeks recent financial statements.euate and recommend appropriate action on the loan request Industry averages Debt Creek Enterprises Income Statement Times interest eamed ratio 7 29 Creek Enterprises Balance Sheet Fred-payment coverage ratio 1.82 Creek Enterprises's debt ratio Round to be decimal places Creek Enterprises Income Statement for the Year Ended December 31, 2015 Sales revenue $29,989,000 Less: Cost of goods sold 20,972,000 Gross profits $9,017,000 Less: Operating expenses Selling expense $2,975,000 General and administrative expenses 1,812,000 Lease expense 226,000 Depreciation expense 1,035,000 Total operating expense 6,048,000 Operating profits $2,969,000 Less: Interest expense 1,003,000 Net profits before taxes $1,966,000 Less: Taxes (rate = 40%) 786,400 Net profits after taxes $1,179,600 Less: Preferred stock dividends 117,000 Earnings available for common stockholders $1,062,600 Creek Enterprises Balance Sheet December 31, 2015 Assets Liabilities and Stockholders' Equity Current assets Current liabilities Cash $964,000 Accounts payable $7,960,000 Marketable securities 3,042,000 Notes payable 8,002,000 Accounts receivable 11,985,000 Accruals 511,000 Inventories 7,497,000 Total current liabilities $16,473,000 Total current assets $23,488,000 Long-term debt (includes financial leases)" $19,374,000 Gross fixed assets (at cost)* Stockholders' equity Land and buildings $11,029,000 Preferred stock (26,000 shares, $4.50 dividend) $2,478,000 Machinery and equipment 20,514,000 Common stock (1.05 million Furniture and fixtures 8,038,000 shares at $5.50 par) 5,775,000 Gross fixed assets $39,581,000 Paid-in capital in excess of par value 3,994,000 Less: Accumulated depreciation 12,989,000 Retained earnings 1,986,000 Net fixed assets $26,592,000 Total stockholders' equity $14,233,000 Total liabilities and Total assets $50,080,000 stockholders' equity $50,080,000 *The firm has a 4-year financial lease requiring annual beginning-of-year payments of $226,000. Three years of the lease have yet to run. **Required annual principal payments are $782,000