Income statements and balance sheets data for Virtual Gaming Systems are provided below. VIRTUAL GAMING SYSTEMS Income Statements For the years ended December 31 2022 2021 Net sales $ 3,485,000 $ 3,011,000 Cost of goods sold 2,475,000 1,945,000 Gross profit 1,010,000 1,066,000 Expenses: Operating expenses 950,000 853,000 Depreciation expense 25,000 24,500 Loss on sale of land 0 7,500 Interest expense 15,500 12,500 Income tax expense 7,500 45,500 Total expenses 998,000 943,000 Net income $ 12,000 $ 123,000 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2022 2021 2020 Assets Current assets: Cash $ 198,500 $ 181,000 $ 139,000 Accounts receivable 72,500 76,000 55,000 Inventory 122,500 100,000 130,000 Prepaid rent 13,500 11,500 5,400 Long-term assets: Investment in bonds 100,000 100,000 0 Land 295,000 205,000 235,000 Equipment 295,000 265,000 205,000 Less: Accumulated depreciation (86,500 ) (61,500 ) (37,000 ) Total assets $ 1,010,500 $ 877,000 $ 732,400 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 234,000 $ 61,000 $ 100,900 Interest payable 7,500 5,000 2,500 Income tax payable 11,500 12,500 13,500 Long-term liabilities: Notes payable 350,000 280,000 220,000 Stockholders' equity: Common stock 295,000 295,000 295,000 Retained earnings 112,500 223,500 100,500 Total liabilities and stockholders equity $ 1,010,500 $ 877,000 $ 732,400 2. Calculate the following profitability ratios for 2021 and 2022: (Round your answers to 1 decimal place.)

Income statements and balance sheets data for Virtual Gaming Systems are provided below.

VIRTUAL GAMING SYSTEMS
Income Statements
For the years ended December 31
	2022				2021
Net sales	$	3,485,000			$	3,011,000
Cost of goods sold		2,475,000				1,945,000
Gross profit		1,010,000				1,066,000
Expenses:
Operating expenses		950,000				853,000
Depreciation expense		25,000				24,500
Loss on sale of land		0				7,500
Interest expense		15,500				12,500
Income tax expense		7,500				45,500
Total expenses		998,000				943,000
Net income	$	12,000			$	123,000

VIRTUAL GAMING SYSTEMS
Balance Sheets
December 31
	2022				2021				2020
Assets
Current assets:
Cash	$	198,500			$	181,000			$	139,000
Accounts receivable		72,500				76,000				55,000
Inventory		122,500				100,000				130,000
Prepaid rent		13,500				11,500				5,400
Long-term assets:
Investment in bonds		100,000				100,000				0
Land		295,000				205,000				235,000
Equipment		295,000				265,000				205,000
Less: Accumulated depreciation		(86,500	)			(61,500	)			(37,000	)
Total assets	$	1,010,500			$	877,000			$	732,400
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	234,000			$	61,000			$	100,900
Interest payable		7,500				5,000				2,500
Income tax payable		11,500				12,500				13,500
Long-term liabilities:
Notes payable		350,000				280,000				220,000
Stockholders' equity:
Common stock		295,000				295,000				295,000
Retained earnings		112,500				223,500				100,500
Total liabilities and stockholders equity	$	1,010,500			$	877,000			$	732,400

2. Calculate the following profitability ratios for 2021 and 2022: (Round your answers to 1 decimal place.)

Gross profit ratio

return on assets

profit margin

asset turnover