The income statement and balance sheet are the primary reports that a firm constructs for use by management and for distribution to stockholders, regulatory bodies, and the general public. They are the primary sources of historical financial information about the firm. Dayton Products, Inc., is a moderate-sized manufacturer. The company’s management has asked you to perform a detailed financial statement analysis of the firm. 

The income statements for the years ending December 31, 2015 and 2014, respectively, are presented in the following table.

You also have the following balance sheet information as of December 31, 2015 and 2014, respectively.

TO DO
a. Create a spreadsheet similar to Table 3.1 to model the following:

(1) A multiple-step comparative income statement for Dayton, Inc., for the periods ending December 31, 2015 and 2014. You must calculate the cost of goods sold for the year 2015.
(2) A common-size income statement for Dayton, Inc., covering the years 2015 and 2014.
b. Create a spreadsheet similar to Table 3.2 to model the following:

(1) A detailed, comparative balance sheet for Dayton, Inc., for the years ended December 31, 2015 and 2014.
(2) A common-size balance sheet for Dayton, Inc., covering the years 2015 and 2014.
c. Create a spreadsheet similar to Table 3.8 to perform the following analysis:

(1) Create a table that reflects both 2015 and 2014 operating ratios for Dayton, Inc., segmented into (a) liquidity, (b) activity, (c) debt, (d) profitability, and
(e) market. Assume that the current market price for the stock is $90.
(2) Compare the 2015 ratios to the 2014 ratios. Indicate whether the results "outperformed the prior year” or “underperformed relative to the prior year.”

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Annual Income Statements (Values in Millions) Sales Cost of goods sold Selling, general, and administrative expenses Other tax expense Depreciation and amortization Other income (add to EBIT to arrive at EBT) Interest expense Income tax rate (average) Dividends paid per share Basic EPS from total operations For the year ended December 31, 2015 December 31, 2014 $178,909 109,701 12,356 33,572 12,103 3,147 398 35.324% $1.13 $1.34 $187,510 111,631 12,900 33,377 7,944 3,323 293 37.945% $0.91 $2.25