E Homework: Chapter 3 Homework Question 8, P3-18 (simila... Part 1 of 5 HW Score: 41.93%, 5.03 of 12 points O : 0 1 Points: 0 of 1 Save Debt analysis Springfield Bank is evaluating Creek Enterprises, which has requested a $4,050,000 loan, to assess the firm's financial leverage and financial risk. On the basis of the debt ratios for Creek, along with the industry averages and Creek's recent financial statements, evaluate and recommend appropriate action on the loan request. Creek Enterprises Income Statement Industry averages Debt ratk Times interest eamed ratio Fixed-payment coverage ratio 0.44 7.59 1.81 -X Creek Enterprises Balance Sheet: Data Table Creek Enterprises's debt ratio is . (Round to two decimal places.) (Click on the icon located on the top-right corner of the data table below in order to copy ils contents into a spreadsheet.) Creek Enterprises Income Statement for the Year Ended December 31, 2015 Sales revenue $29,971,000 Less: Cost of goods sold 20,952,000 Gross profils $9.019,000 Less: Operating expenses Selling expense $2,961.000 General and administrative expenses 1,781,000 Lease expense 212,000 Depreciation expense 969,000 Total operating expense 5,923,000 Operating profils $3,098,000 Less: Interest expense 950,000 Net profits before taxes $2,146,000 Less: Taxes (rate 40%) 858,400 Net profits after taxes $1,287,600 Less: Preferred stock dividends 116,550 Earnings available for common stockholders $1,171,050 Print Done Help Me Solve This View an Example Get More Help E Homework: Chapter 3 Homework Question 8, P3-18 (simila... Part 1 of 5 HW Score: 41.93%, 5.03 of 12 points O Points: 1 of 1 : Save Debt analysis Springfield Bank is evaluating Creek Enterprises, which has requested a $4,050,000 loan, to assess the firm's financial leverage and financial risk. On the basis of the debt ratios for Creek, along with the industry averages and Creek's recent financial statements, evaluate and recommend appropriate action on the loan request. Croek Enterprises Income Statement - Industry averages Debt ratk Times interest eamed ratio Fixed-payment coverage ratio Data Table 0.44 7.59 1.81 Creek Enterprises Balance Sheet: 3 Creek Enterprises's debt ratio is . (Round to two decimal places.) Creek Enterprises Balance Sheet December 31, 2015 Assets Liabilities and Stockholders' Equity Current assels Current liabilities Cash $1,009,000 Accounts payable $8,033,000 Marketable securities 2,972,000 Notes payable 8,001.000 Accounts receivable 12,010,000 Accruals 485.000 Inventories 7,546,000 Total current liabilities $16,519.000 Tolal current assels 523,537,000 Long-term debt (includes financial leases) S19,437,500 Gruss fixed assets (at cost)" Stockholders' equity Land and buildings $10,980,000 Preferred stock (25,900 shares, S4.50 dividend) $2,500,000 Machinery and equipment 20,539,000 Common stock (1.17 million Furniture and fixtures 7.969,000 shares at $4.75 par) 5,557,500 Gross fixed assets $39,488,000 Pald-in capital in excess of par value 4,017,000 Less: Accumulated depreciation 13,041,000 Retained earnings 1,953,000 Net fixed assets $26,447,000 Total stockholders' equity $14,027,500 Total liabilities and Total assets $49,984,000 stockholders' equity $49.984,000 "The firm has a 4-year financial lease requiring annual beginning-of-year payments of $212,000. Three years of the loase have yet to run **Required annual principal payments are $842,000. Help Me Solve This View an Example Get More Help Print Done