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ant 1 Chapter 3B Debt analysis Springfield Bank is evaluating Creek Enterprises, which has requested a $3,530,000 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. Industry averages Creek Enterprises Income Statement: Debt ratio 0.49 Times interest eamed ratio 7.30 Creek Enterprises Balance Sheet: Fixed-payment coverage ratio 2.03 Creek Enterprises's debt ratio is 0.72 (Round to two decimal places.) Creek Enterprises's times interest earned ratio is 3.03% (Round to two decimal places.) Creek Enterprises's fixed-payment coverage ratio is (Round to two decimal places.) AR ANWA X Data Table spreadsheet.) Creek Enterprises Income Statement for the Year Ended December 31, 2019 Sales revenue $30,042,000 Less: Cost of goods sold 21,045,000 Gross profits $8,997,000 Less: Operating expenses Selling expense $2,961,000 General and administrative expenses 1,800,000 Lease expense 181,000 Depreciation expense 1,012,000 Total operating expense 5,954,000 Operating profits $3,043,000 Less: interest expense 1,003,000 Net profits before taxes $2,040,000 Less: Taxes (rate - 21%) 428,400 Net profits after taxes $1,611,600 Less: Preferred stock dividends 105,400 Earnings available for common stockholders $1,506,200 Print Done Data Table Assets Current assets Cash Marketable securities Accounts receivable Inventories Total current assets $1,035,000 2,959,000 11,983,000 7,540,000 $23,517,000 Liabilities and Stockholder: Current liabilities Accounts payable Notes payable Accruals Total current liabilities Long-term debt (includes financial leases)** Stockholders' equity Preferred stock (24,800 shares, $4.25 dividend) Common stock (1.02 million shares at $5.50 par) Paid-in capital in excess of Gross fixed assets (at cost) Land and buildings $11,044,000 Machinery and equipment Furniture and fixtures Gross fixed assets 20,496,000 7.989,000 $39,529,000 par value Less: Accumulated depreciation 13,047,000 Retained earnings Net fixed assets $26.482,000 Total stockholders' equity Total liabilities and Total assets $49.999,000 stockholders' equity "The firm has a 4-year financial lease requiring annual beginning-of-year payments of $181 Se of the lanchauntin - X Data Table SS St. re Cre Assets Liabilities and Stockholders' Equity Current liabilities $1,035,000 Accounts payable $7,967,000 surities 2,959,000 Notes payable 8,026,000 vable 11,983,000 Accruals 476,000 7,540,000 Total current liabilities $16,469,000 ssets $23,517,000 Long-term debt (includes financial leases)** $19,485,000 sets (at cost) Stockholders' equity suildings $11,044,000 Preferred stock (24,800 shares, $4.25 dividend) $2,476,000 and equipment 20,496,000 Common stock (1.02 million nd fixtures 7,989,000 shares at $5.50 par) 5,610,000 sets $39,529,000 Paid-in capital in excess of par value 3,993,000 ated depreciation 13,047,000 Retained earnings 1,966,000 $26.482,000 S Total stockholders' equity $14,045,000 Total liabilities and $49,999,000 stockholders' equity $49,999,000 4-year financial lease requiring annual beginning-of-year payments of $181,000. Three ise have vet to nun Ore Homework: HW #3- Chapter 3B Question 1, P3-16 (simila... Part 3 of 5 HW Score: 84.03%, 34.45 of 41 Score: 0.86 of 6 ent 1 Debt analysis Springfield Bank is evaluating Creek Enterprises, which has requested a $3,530,000 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 Industry averages Debt ratio Creek Enterprises Income Statement: Times interest earned ratio 7.30 Fixed-payment coverage ratio 2.03 Creek Enterprises Balance Sheet 0.49 Creek Enterpries's debt ratio is 0.72. (Round to two decimal places.) Creek Enterprises's times interest earned ratio is 3.03 (Round to two decimal places.) Creek Enterprises's fixed-payment coverage ratio is 1. (Round to two decimal places.) Corvinur answer in the answer box and then click Check Answer LUVAT JA - Data Table spreadsheet.) Creek Enterprises Income Statement for the Year Ended December 31, 2019 Sales revenue $30,042,000 Less: Cost of goods sold 21,045,000 Gross profits $8,997,000 Less: Operating expenses Selling expense $2,961,000 General and administrative expenses 1,800,000 Lease expense 181,000 Depreciation expense 1,012,000 Total operating expense 5,954,000 Operating profits $3,043,000 Less: Interest expense 1,003,000 Net profits before taxes $2,040,000 Less: Taxes (rate = 21%) 428,400 Net profits after taxes $1,611,600 Less: Preferred stock dividends 105,400 $1,506,200 Earnings available for common stockholders Homework: 28. - > Data Table JU UEU AU Assets Liabilities and Stockholder Current assets Current liabilities Cash $1,035,000 Accounts payable Marketable securities 2,959,000 Notes payable Accounts receivable 11,983,000 Accruals Inventories 7,540,000 Total current liabilities Total current assets $23,517,000 Long-term debt (includes financial leases)** Gross fixed assets (at cost)* Stockholders' equity Land and buildings $11,044,000 Preferred stock (24,800 shares, $4.25 dividend) Machinery and equipment 20,496,000 Common stock (1.02 million Furniture and fixtures 7,989,000 shares at $5.50 par) Gross fixed assets $39,529,000 Paid-in capital in excess of par value Less: Accumulated depreciation 13,047.000 Retained earnings Net fixed assets $26.482,000 Total stockholders' equity Total liabilities and Total assets $49,999.000 stockholders' equity The firm has a 4-year financial lease requiring annual beginning-of-year payments of $181 OTREpower memory ssets Liabilities and Stockholders' Equity Current liabilities $1,035,000 Accounts payable $7,967,000 2,959,000 Notes payable 8,026,000 11,983,000 Accruals 476,000 7,540,000 Total current liabilities $16,469,000 $23,517,000 Long-term debt (includes financial leases)** $19,485,000 post)* Stockholders' equity $11,044,000 Preferred stock (24,800 shares, $4.25 dividend) $2,476,000 uipment 20,496,000 Common stock (1.02 million res 7,989,000 shares at $5.50 par) 5,610,000 $39,529,000 Paid-in capital in excess of 3,993,000 Epreciation 13,047,000 Retained earnings 1,966,000 $26.482,000 Total stockholders' equity $14,045,000 Total liabilities and $49,999,000 stockholders' equity $49,999,000 r financial lease requiring annual beginning-of-year payments of $181,000. Three par value Gross fixed assets (at cost)* Land and buildings $11,044,000 Stockholders' equity Preferred stock (24,800 shares, $4.25 dividend) Common stock (1.02 million shares at $5.50 par) Paid-in capital in excess of Machinery and equipment Furniture and fixtures Gross fixed assets 20,496,000 7,989,000 $39,529,000 par value Less: Accumulated depreciation 13,047,000 Retained earnings Net fixed assets $26,482,000 Total stockholders' equity Total liabilities and Total assets $49,999,000 trockholders' equity *The firm has a 4-year financial lease requiring annual beginning-of-year payments of $1 years of the lease have yet to run. **Required annual principal payments are $798,000. ant 1 Chapter 3B Debt analysis Springfield Bank is evaluating Creek Enterprises, which has requested a $3,530,000 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. Industry averages Creek Enterprises Income Statement: Debt ratio 0.49 Times interest eamed ratio 7.30 Creek Enterprises Balance Sheet: Fixed-payment coverage ratio 2.03 Creek Enterprises's debt ratio is 0.72 (Round to two decimal places.) Creek Enterprises's times interest earned ratio is 3.03% (Round to two decimal places.) Creek Enterprises's fixed-payment coverage ratio is (Round to two decimal places.) AR ANWA X Data Table spreadsheet.) Creek Enterprises Income Statement for the Year Ended December 31, 2019 Sales revenue $30,042,000 Less: Cost of goods sold 21,045,000 Gross profits $8,997,000 Less: Operating expenses Selling expense $2,961,000 General and administrative expenses 1,800,000 Lease expense 181,000 Depreciation expense 1,012,000 Total operating expense 5,954,000 Operating profits $3,043,000 Less: interest expense 1,003,000 Net profits before taxes $2,040,000 Less: Taxes (rate - 21%) 428,400 Net profits after taxes $1,611,600 Less: Preferred stock dividends 105,400 Earnings available for common stockholders $1,506,200 Print Done Data Table Assets Current assets Cash Marketable securities Accounts receivable Inventories Total current assets $1,035,000 2,959,000 11,983,000 7,540,000 $23,517,000 Liabilities and Stockholder: Current liabilities Accounts payable Notes payable Accruals Total current liabilities Long-term debt (includes financial leases)** Stockholders' equity Preferred stock (24,800 shares, $4.25 dividend) Common stock (1.02 million shares at $5.50 par) Paid-in capital in excess of Gross fixed assets (at cost) Land and buildings $11,044,000 Machinery and equipment Furniture and fixtures Gross fixed assets 20,496,000 7.989,000 $39,529,000 par value Less: Accumulated depreciation 13,047,000 Retained earnings Net fixed assets $26.482,000 Total stockholders' equity Total liabilities and Total assets $49.999,000 stockholders' equity "The firm has a 4-year financial lease requiring annual beginning-of-year payments of $181 Se of the lanchauntin - X Data Table SS St. re Cre Assets Liabilities and Stockholders' Equity Current liabilities $1,035,000 Accounts payable $7,967,000 surities 2,959,000 Notes payable 8,026,000 vable 11,983,000 Accruals 476,000 7,540,000 Total current liabilities $16,469,000 ssets $23,517,000 Long-term debt (includes financial leases)** $19,485,000 sets (at cost) Stockholders' equity suildings $11,044,000 Preferred stock (24,800 shares, $4.25 dividend) $2,476,000 and equipment 20,496,000 Common stock (1.02 million nd fixtures 7,989,000 shares at $5.50 par) 5,610,000 sets $39,529,000 Paid-in capital in excess of par value 3,993,000 ated depreciation 13,047,000 Retained earnings 1,966,000 $26.482,000 S Total stockholders' equity $14,045,000 Total liabilities and $49,999,000 stockholders' equity $49,999,000 4-year financial lease requiring annual beginning-of-year payments of $181,000. Three ise have vet to nun Ore Homework: HW #3- Chapter 3B Question 1, P3-16 (simila... Part 3 of 5 HW Score: 84.03%, 34.45 of 41 Score: 0.86 of 6 ent 1 Debt analysis Springfield Bank is evaluating Creek Enterprises, which has requested a $3,530,000 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 Industry averages Debt ratio Creek Enterprises Income Statement: Times interest earned ratio 7.30 Fixed-payment coverage ratio 2.03 Creek Enterprises Balance Sheet 0.49 Creek Enterpries's debt ratio is 0.72. (Round to two decimal places.) Creek Enterprises's times interest earned ratio is 3.03 (Round to two decimal places.) Creek Enterprises's fixed-payment coverage ratio is 1. (Round to two decimal places.) Corvinur answer in the answer box and then click Check Answer LUVAT JA - Data Table spreadsheet.) Creek Enterprises Income Statement for the Year Ended December 31, 2019 Sales revenue $30,042,000 Less: Cost of goods sold 21,045,000 Gross profits $8,997,000 Less: Operating expenses Selling expense $2,961,000 General and administrative expenses 1,800,000 Lease expense 181,000 Depreciation expense 1,012,000 Total operating expense 5,954,000 Operating profits $3,043,000 Less: Interest expense 1,003,000 Net profits before taxes $2,040,000 Less: Taxes (rate = 21%) 428,400 Net profits after taxes $1,611,600 Less: Preferred stock dividends 105,400 $1,506,200 Earnings available for common stockholders Homework: 28. - > Data Table JU UEU AU Assets Liabilities and Stockholder Current assets Current liabilities Cash $1,035,000 Accounts payable Marketable securities 2,959,000 Notes payable Accounts receivable 11,983,000 Accruals Inventories 7,540,000 Total current liabilities Total current assets $23,517,000 Long-term debt (includes financial leases)** Gross fixed assets (at cost)* Stockholders' equity Land and buildings $11,044,000 Preferred stock (24,800 shares, $4.25 dividend) Machinery and equipment 20,496,000 Common stock (1.02 million Furniture and fixtures 7,989,000 shares at $5.50 par) Gross fixed assets $39,529,000 Paid-in capital in excess of par value Less: Accumulated depreciation 13,047.000 Retained earnings Net fixed assets $26.482,000 Total stockholders' equity Total liabilities and Total assets $49,999.000 stockholders' equity The firm has a 4-year financial lease requiring annual beginning-of-year payments of $181 OTREpower memory ssets Liabilities and Stockholders' Equity Current liabilities $1,035,000 Accounts payable $7,967,000 2,959,000 Notes payable 8,026,000 11,983,000 Accruals 476,000 7,540,000 Total current liabilities $16,469,000 $23,517,000 Long-term debt (includes financial leases)** $19,485,000 post)* Stockholders' equity $11,044,000 Preferred stock (24,800 shares, $4.25 dividend) $2,476,000 uipment 20,496,000 Common stock (1.02 million res 7,989,000 shares at $5.50 par) 5,610,000 $39,529,000 Paid-in capital in excess of 3,993,000 Epreciation 13,047,000 Retained earnings 1,966,000 $26.482,000 Total stockholders' equity $14,045,000 Total liabilities and $49,999,000 stockholders' equity $49,999,000 r financial lease requiring annual beginning-of-year payments of $181,000. Three par value Gross fixed assets (at cost)* Land and buildings $11,044,000 Stockholders' equity Preferred stock (24,800 shares, $4.25 dividend) Common stock (1.02 million shares at $5.50 par) Paid-in capital in excess of Machinery and equipment Furniture and fixtures Gross fixed assets 20,496,000 7,989,000 $39,529,000 par value Less: Accumulated depreciation 13,047,000 Retained earnings Net fixed assets $26,482,000 Total stockholders' equity Total liabilities and Total assets $49,999,000 trockholders' equity *The firm has a 4-year financial lease requiring annual beginning-of-year payments of $1 years of the lease have yet to run. **Required annual principal payments are $798,000

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