12-6A Use ratios to analyze risk and profitability (LO12-3, 12-4) [The following information applies to the questions displayed below] Income statements and balance sheets data for Virtual Gaming Systems are provided below. VIRTUAL GAMING SYSTEMS Income Statements For the yeate ended December 31 Net sales 2022 2021 $3,500,000 $3,026,000 Cost of goods sold 2,478,000 1,948,000 Gross profit 1,022,000 1,070,000 Operating expenses 953,000 856,000 Depreciation expense 28,000 26,000 Loss on sale of land 0 7,800 Interest expense, 17,000 14,000 Income tax expense 7,000 47,000 Total expenses 1,005,800 950,800 Net income $ 16,200 127,200 ces Assets Current assets) Cash Accounts receivable VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2022 2021 2020. Inventory Prepaid rent Long-term assets: Investment in bonds Land Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities Notes payable Stockholders equity: Common stock Retained earnings Total liabilities and stockholders' equity Problem 12-6A Part 1 $200,000 74,000 $184,000 79,000 $142,000 58,000 124,000 103,000 133,000 13,800 11,800 5,760 103,000 103,000 298,000 200,000 238,000 268,000 208,000 0 298,000 (94,000) (66,000) (40,000) $1,016,800 $890,800 $744,760 5 203,400 $ 64,000 $108,160 8,400 11,800 3,600 14,000 2,000 13,000 380,000 283,000 223,000 298,000 298,000 298,000 115,200 226,2001 99,000 $1,016,000 $890,000 5744,760 Required: 1. Calculate the following risk ratios for 2021 and 2022: (Round your answers to 1 decimal place.) 2021 2022 Receivables turnover ratio ARDER times times Inventory turnover ratio Current ratio Debt to equity ratio times 4.5 to 1 69.9 % 146.1 % times 1.8 to 1 2. Calculate the following profitability ratios for 2021 and 2022: (Round your answers to 1 decimal place.) 2021 2022 Gross profit ratio % % Return on assets % % Profit margin % % Asset turnover times times