springfield bank is evaluating creek enterprises

P3-18 Springfield Bank is evaluating Creek Enterprises, which has requested a $4,000,000 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 (see the top of the next page) and Creek’s recent financial statements (following), evaluate and recommend appropriate action on the loan request


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 5 40%)                                                                    800,000

       Net profits after taxes                                                             $ 1,200,000

Less: Preferred stock dividends                                                           100,000

       Earnings available for common stockholders                           $ 1,100,000


Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Enjoy 10% OFF today with the coupon code: save10