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 year ended December 31 2019 2018 $3,475,000 2,473,000 $3,001,000 1,943,000 Net sales Cost of goods sold Gross profit 1,002,000 1,058,000 Expenses Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense 948,000 23,000 0 14,500 7,300 851,000 23,500 7,300 11,500 44,500 Total expenses 992,800 937,800 Net income $ 9,200 $ 120,200 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2019 2018 2017 Assets Current assets Cash Accounts receivable Inventory Prepaid rent 197,500 71,500 121,500 13,300 $179,000 74,000 98,000 11,300 $137,000 53,000 128,000 5,160 Long-term assets Investment in bonds Land Equipment Less: Accumulated depreciation 98,000 293,000 293,000 (81,500) 98,000 203,000 263,000 (58,500) 0 233,000 203,000 (35,000) Total assets $1,006,300 $867,800 $724,160 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable $ 254,400 6,900 11,300 $59,000 4,600 11,500 $96,060 2,300 13,300 Long-term liabilities Notes payable 330,000 278,000 218,000 Stockholders' equity: Common stock Retained earnings 293,000 110,700 293,000 221,700 293,000 101,500 Total liabilities and stockholders' equity $1,006,300 $867,800 $724160 Problem 12-6A Part 1 Required: 1. Calculate the following risk ratios for 2018 and 2019: (Round your answers to 1 decimal place.) 2018 2019 Receivables turnover ratio Inventory turnover ratio Current ratio Debt to equity ratio times times to 1 times to 1 Problem 12-6A Part 2 2. Calculate the following profitability ratios for 2018 and 2019: (Round your answers to 1 decimal place.) 2018 2019 Gross profit ratio Return on assets Profit margin Asset turnover times times