Problem 12-6A Use ratios to analyze risk and profitability (L012-3, 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 years ended December 31 2022 2021 Net sales $3,505,000 $3,031,000 Cost of goods sold 2,479,000 1,949,000 Gross profit 1,026,000 1,082,000 Expenses: Operating expenses 954,000 857,000 Depreciation expense 29,000 26,500 Loss on sale of land 0 7,900 Interest expense 17,500 14,500 Income tax expense 7,900 47,500 Total expenses 1,008,400 953,400 Net income $ 17,600 $ 128,600 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2022 2021 2020 $ 200,500 74,500 124,500 13,900 $185,000 80,000 104,000 11,900 $143,000 59,000 134,000 5,880 Assets Current assets: Cash Accounts receivable 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 104,000 299,000 299,000 (96,500) $1,018,900 104,000 209,000 269,000 (67,500) $895,400 0 239,000 209,000 (41,000) $748,880 193,200 8,700 11,900 $ 65,000 5,800 14,500 $110,580 2,900 13,900 390,000 284,000 224,000 299,000 116,100 $1,018,900 299,000 227,100 $895,400 299,000 98,500 $748,880 Problem 12-6A Part 2 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