Problem 12-6A (Algo) 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. Net sales VIRTUAL GAMING SYSTEMS Income Statements For the Years Ended December 31 1 Cost of goods sold Expenses: 2025 $3,480,000 2,474,000 2024 $3,006,000 1,944,000 1,062,000 Gross profit 1,006,000 Operating expenses 949,000 852,000 Depreciation expense 24,000 24,000 Loss on sale of land 0 7,400 Interest expense 15,000 12,000 Income tax expense 7,400 45,000 Total expenses Net income 995,400 940,400 10,600 121,600 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2025 2024 2023 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investment in bonds. Land Equipment $198,000 $180,000 $138,000 72,000 75,000 54,000 122,000 99,000 129,000 13,400 11,400 5,280 99,000 99,000 0 294,000 204,000 234,000 294,000 264,000 204,000 Less: Accumulated depreciation (84,000) (60,000) (36,000) Total assets $1,008,400 $872,400 $728,280 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $244,200 $60,000 $98,480 Interest payable 7,200 4,800 2,400 Income tax payable 11,400 12,000 13,400 Long-term liabilities: Notes payable 340,000 279,000 Stockholders' equity: 219,000 Common stock 294,000 294,000 294,000 Retained earnings 111,600 222,600 101,000 Total liabilities and stockholders' equity $1,008,400 $872,400 $728,280 Problem 12-6A (Algo) Part 1 Required: 1. Assuming that all sales were on account, calculate the following risk ratios for 2024 and 2025: (Round your answers to 1 decimal place.) Receivables turnover ratio Inventory turnover ratio Current ratio Debt to equity ratio 2024 2025 times times times times % % Problem 12-6A (Algo) Part 2 2. Calculate the following profitability ratios for 2024 and 2025: (Round your answers to 1 decimal place.) Gross profit ratio Return on assets Profit margin Asset turnover 2024 2025 % % % % % % times times