CASE 3 (25 points) ) Income statements and balance sheets for Melia Corporation follow. Income Statements for Years 2015 and 2016 2016 Net sales -Cast of goods sold Gross profit -Administrative expenses Marketing expenses - Research and development -Depreciation EBIT -Interest expense Income before taxes -Income taxes (30% rate) Net income 2015 $438.000 -285.000 153,000 -45,000 -32,000 -20,000 -14,000 42.000 -12,000 30,000 -9,000 $ 21,000 $575.000 - 380,000 195.000 -65,000 -39,000 -27,000 -17,000 47.000 -20,000 27,000 -8,000 $ 19,000 2016 Balance Sheets for Years Ended 2014, 2015, and 2016 , ASSETS 2014 2015 Cash and marketable Securities $ 10,000 $ 10.000 Receivables 60,000 75,000 Inventories 70.000 96.000 Total current assets 140,000 180,000 Gross plant and equipment 205,000 205,000 Less: accumulated depreciation -28,000 -42.000 Net plant and equipment 177,000 163,000 Total assets $317,000 $343,000 Liabilities and Equity Payables 47,000 57,000 Short-term bank loan 40,000 44.000 Accrued liabilities 8.000 9.000 Total current liabilities 95,000 110.000 Long-term debt 100,000 90,000 Owners' equity 122.000 143.000 Total liabilities and equity $317,000 $343,000 $ 5.000 105.000 100.000 250,000 255,000 -59,000 196.000 $446,000 84,000 110,000 10,000 204,000 80,000 162,000 $445,000 Instructions: 1. Using the above information, calculate for 2015 and 2016 the following: a. Receivables turnover, Inventory turnover, and Payables turnover. (5 points) ) b. Receivables period, Inventory period, and Payables period. (5 points) c. Operating Cycle and Cash Conversion Cycle. (5 points) 2. Discuss the changes that took place from 2015 to 2016 and suggest the ways how the company could improve its performance. (10 points)