P3-20 Common-size statement analysis A common-size income statement for Creek Enter- prises' 2014 operations follows. Using the firm's 2015 income statement presented in Problem 3-18, develop the 2015 common-size income statement and compare it with the 2014 statement. Which areas require further analysis and investigation? Creek Enterprises Common-Size Income Statement for the Year Ended December 31, 2014 100.0% 65.9 34.1% 12.7% 6.3 0.6 3.6 Sales revenue ($35,000,000) Less: Cost of goods sold Gross profits Less: Operating expenses Selling expense General and administrative expenses Lease expense 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 Earnings available for common stockholders 23.2 10.9% 1.5 9.4% 3.8 5.6% 0.1 5.5% Creek Enterprises Income Statement for the Year Ended December 31, 2015 Sales revenue $30,000,000 Less: Cost of goods sold 21,000,000 Gross profits $ 9,000,000 Less: Operating expenses Selling expense $ 3,000,000 General and administrative expenses 1,800,000 Lease expense 200,000 Depreciation expense 1,000,000 Total operating expense $ 6,000,000 Operating profits $ 3,000,000 Less: Interest expense 1,000,000 Net profits before taxes $ 2,000,000 Less: Taxes (rate = 40%) 800,000 Net profits after taxes $ 1,200,000 Less: Preferred stock dividends 100,0000 Earnings available for common stockholders $ 1,100,000