preadsheet Exercise 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. 160 PART 2 Financial Tools The income statements for the years ending December 31, 2015 and 2014, spectively, are presented in the following table. Annual Income Statements (Values in Millions) For the year ended December 31, 2015 December 31, 2014 Sales $178,909 $187,510 Cost of goods sold 109,701 111,631 Selling, general, and administrative expenses 12,356 12.900 Other tax expense 33,572 33,377 Depreciation and amortization 12,103 7,944 Other income (add to EBIT to arrive at EBT) 3,147 3,323 Interest expense 398 293 Income tax rate (average) 35.324% 37.945% Dividends paid per share $1.13 $0.91 Basic EPS from total operations $1.34 $2.25 You also have the following balance sheet information as of December 31, 2015 and 2014, respectively. Annual Balance Sheets (Values in Millions) December 31, 2015 Cash $ 7,229 Receivables 21,163 Inventories 8,068 Other current assets 1,831 Property, plant, and equipment, gros 204,960 Accumulated depreciation and depletion 110,020 Other moncurrent assets 19.413 Accounts payable 13,792 Short-term debt payable 4,093 Other current liabilities 15,290 Long-term debt payable 6,655 Deferred income taxes 16,484 Other noncurrent liabilities 21,733 Retained earning 74,597 Total common shares outstanding 6.7 billion December 31, 2014 $ 6,547 19,549 7,904 1,681 187,519 97,917 17,891 22,862 3,703 3,549 7,099 16,359 16,441 73,161 6.8 billion CHAPTER 3 Financial Statements and Ratio Analysis 161 year 2015. 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 peri- ods ending December 31, 2015 and 2014. You must calculate the cost of goods sold for the ye (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