Income statement and balance sheet data for Virtual Gaming Systems are provided below.

Required:

1. Calculate the following risk ratios for 2021 and 2022:

a. Receivables turnover ratio. c. Current ratio.

b. Inventory turnover ratio. d. Debt to equity ratio.

2. Calculate the following profitability ratios for 2021 and 2022:

a. Gross profit ratio. c. Profit margin.

b. Return on assets. d. Asset turnover.

3. Based on the ratios calculated, determine whether overall risk and profitability improved from 2021 to 2022.

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VIRTUAL GAMING SYSTEMS Income Statements For the years ended December 31 2022 2021 $3,560,000 2,490,000 1,070,000 $3,086,000 1,960,000 1,126,000 Net sales Cost of goods sold Gross profit Expenses: Operating expenses Depreciation expense Loss on sale of land 965,000 868,000 40,000 32,000 9,000 Interest expense 23,000 9,000 20,000 Income tax expense 58,000 987,000 $ 139,000 Total expenses 1,037,000 2$ 33,000 Net income