Problem 12-6A Use ratios to analyze risk and profitability (L012-3, 12-4) [The following information applies to the questions displayed below.] Income statement and balance sheet data for Virtual Gaming Systems are provided below. VIRTUAL GAMING SYSTEMS Income Statements For the years ended December 31 2022 2021 Net sales $3,560,000 $3,086,000 Cost of goods sold 2,490,000 1,960,000 Gross profit 1,070,000 1,126,000 Expenses : Operating expenses 965,000 868,000 Depreciation expense 40,000 32,000 Loss on sale of land 0 9,000 Interest expense 23,000 20,000 Income tax expense 9,000 58,000 Total expenses 1,037,000 987,000 Net income $ 33,000 $ 139,000 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2022 2021 2020 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Tnvestment in bonds $ 216,000 90,000 140,000 15,000 $196,000 $154,000 91,000 70,000 115,000 145,000 13,000 7,200 115.000 115.000 0 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2022 2021 2020 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 $ 216,000 $196,000 $154,000 90,000 91,000 70,000 140,000 115,000 145,000 15,000 13,000 7,200 115,000 115,000 0 310,000 220,000 250,000 310,000 280,000 220,000 (124,000) (84,000). (52,000) $1,072,000 $946,000 $794,200 $ 161,000 $ 76,000 $ 91,000 12,000 8,000 4,000 13,000 20,000 15,000 450,000 295,000 235,000 310,000 310,000 310,000 126,000 237,000 139,200 $1,072,000 $946,000 $794,200 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