You have been hired as an analyst for First Financial Services and you have been assigned to the task to evaluate the financial health of Daffy Duck Food (DDF) and to determine if the corporation chance in obtaining a loan. Your assistant has provided you with the following data of Daffy Duck Food at November 30, 2016 and their industry standard. Ratio Stock days Debtor days Creditor days Times Interest Earned Gross profit Net profit ratio Current ratio Quick ratio Debt to Equity Sales growth Long-term debt Industry standard 85 days 75 days 70 days 15 X 32% 2016 2015 130 116 98 91 95 17X 31% 17% 90 9X 27% 12% 9% 2.1:1 0.85:1 1. 2 1. 4 0. 6 0.85 53% 0.45 0.7 0.90 31% 0.40 0.80 0.35 Required: Calculate the length of the cash operating cycle (working capital cycle) for each year based on the ratios shown in the table above (show your calculations). a) [4 Marks] Explain the significance of the cash operating cycle b) 2 Marks) As the newly-appointed CEO, prepare a report in good format to management explaining whether the corporation is likely to be successful if it approaches a bank for a loan of $300,000. Your report should include a discussion of the financial ratios shown in the table plus the additional data shown below c) 14 Marks] Additional data extracted from the corporation's financial statement for the year 2016 and 2015: 2016 $000 2015 $'000 Net Sales Operating expenses Working capital 91,500 43,500 4,700 59,700 37,500 7,800