KE- Data table Industry averages Debt ratio Times interest eamed ratio Fixed-payment coverage ratio Debt analysis...

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KE- Data table Industry averages Debt ratio Times interest eamed ratio Fixed-payment coverage ratio Debt analysis Springfield Bank is evaluating Creek Enterprises, which has requested a $3,560,000 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 Creek Enterprises Balance Sheet: Creek Enterprises's debt ratio is 0.72 (Round to two decimal places) Creek Enterprises's times interest eamed ratio is 3.2 (Round to two decima Creek Enterprises's fixed-payment coverage ratio is 2.84 (Round to two de 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 Total operating expense 0.45 7.48 2.11 Operating profits Less: Interest expense Net profits before taxes Less: Taxes (rate=21%) Net profits after taves Less: Preferred stock dividends Earnings available for common stockholders $3,012,000 1,750,000 183,000 1,004,000 $29.998,000 20,972,000 $9,026,000 5,949,000 $3,077,000 963,000 $2,114,000 443,940 $1,670,000 104,975 $1,565,085 MacBook Pro Data table Current assets Cash Marketable securities Accounts receivable Inventories Total current assets UFURS Gross fixed assets (at cost) Land and buildings Creek Enterprises Balance Sheet December 31, 2022 Assets Gross fixed assets Machinery and equipment Furniture and fixtures Less: Accumulated depreciation Net fixed assets $996,000 2,900,000 12.038,000 Accruals 7,502.000 $23,490,000 $11,028,000 20,495,000 7,964,000 $39,487,000 12.995,000 $26.492,000 Liabilities and Stockholders' Equity Current liabilities Accounts payable Print Notes payable Total cument liabilities Long-term debt (includes financial leases)** Stockholders' equity Preferred stock (24,700 shares, $4.25 dividend) Common stock (1.01 million shares at $5.25 par) Paid-in capital in excess of par value Retained earnings 1043 PM Total stockholders' equity Total liabilities and stockholders' equity Done $7,988,000 7,964,000 456,000 $16,408.000 $19,790,500 $2,472,000 5,302,500 Total assets $49,988,000 $49,986,000 "The firm has a 4-year lease requiring annual beginning-of-year payments of $183,000. Three years of the lease have yet to run **Required annual principal payments are $807,000. 4,005.000 2,010,000 $13,789,500 KE- Data table Industry averages Debt ratio Times interest eamed ratio Fixed-payment coverage ratio Debt analysis Springfield Bank is evaluating Creek Enterprises, which has requested a $3,560,000 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 Creek Enterprises Balance Sheet: Creek Enterprises's debt ratio is 0.72 (Round to two decimal places) Creek Enterprises's times interest eamed ratio is 3.2 (Round to two decima Creek Enterprises's fixed-payment coverage ratio is 2.84 (Round to two de 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 Total operating expense 0.45 7.48 2.11 Operating profits Less: Interest expense Net profits before taxes Less: Taxes (rate=21%) Net profits after taves Less: Preferred stock dividends Earnings available for common stockholders $3,012,000 1,750,000 183,000 1,004,000 $29.998,000 20,972,000 $9,026,000 5,949,000 $3,077,000 963,000 $2,114,000 443,940 $1,670,000 104,975 $1,565,085 MacBook Pro Data table Current assets Cash Marketable securities Accounts receivable Inventories Total current assets UFURS Gross fixed assets (at cost) Land and buildings Creek Enterprises Balance Sheet December 31, 2022 Assets Gross fixed assets Machinery and equipment Furniture and fixtures Less: Accumulated depreciation Net fixed assets $996,000 2,900,000 12.038,000 Accruals 7,502.000 $23,490,000 $11,028,000 20,495,000 7,964,000 $39,487,000 12.995,000 $26.492,000 Liabilities and Stockholders' Equity Current liabilities Accounts payable Print Notes payable Total cument liabilities Long-term debt (includes financial leases)** Stockholders' equity Preferred stock (24,700 shares, $4.25 dividend) Common stock (1.01 million shares at $5.25 par) Paid-in capital in excess of par value Retained earnings 1043 PM Total stockholders' equity Total liabilities and stockholders' equity Done $7,988,000 7,964,000 456,000 $16,408.000 $19,790,500 $2,472,000 5,302,500 Total assets $49,988,000 $49,986,000 "The firm has a 4-year lease requiring annual beginning-of-year payments of $183,000. Three years of the lease have yet to run **Required annual principal payments are $807,000. 4,005.000 2,010,000 $13,789,500

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