CASE 3 (25 points) Income statements and balance sheets for Melia Corporation follow Income Statements for Years 2015 and 2016 Net sales -Cost of goots sold Gross profit -Administrative expenses Marketing expenses -Research and development Depreciation EBIT 2015 $438,000 -285,000 153.000 -45.000 - 32.000 -20.000 -14.000 42.000 2016 $575,000 -380,00 195.0 -65.000 - 59.000 27.000 -17.000 20,000 Interest expense income before income taxe Netcome 30.000 $ 21.000 $10.00 Balance Sheets for Years Ended 2014, 2015, and 2016 2014 ASSETS Cash and marketable securities Receivables $10.000 60.000 70.000 100.000 205.000 -28.000 177,000 $317.000 2015 $ 10.000 75.000 95.000 180,000 205,000 42.000 163.000 $340,000 2015 $ 5.000 105.000 140.000 250,000 255,000 196.000 $445.000 Total currentes Gross plant and equipment Less accumulated depreciation Net plant and equipment Total assets Liabilities and Equity Payables Short te bank loan Accrued liabilities Total Dumentaties long-term debt Owen equity Total liabilities and equity 47.000 40.000 8.000 95.000 100.000 122.000 $317.000 57.000 44.000 9.000 110.000 90,000 143.000 $343.000 84.000 110.000 10.000 204.000 80,000 162.000 $146.000 Instructions: 1. Using the above information, calculate for 2015 and 2016 the following: (5 points) a. Receivables turnover, Inventory turnover, and Payables turnover. b. Receivables period, Inventory period, and Payables period. (5 points) (5 points) c. Operating Cycle and Cash Conversion Cycle. 2. Discuss the changes that took place from 2015 to 2016 and suggest the ways how the company could improve its performance (10 points)