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,eee $3,086,eee Cost of goods sold 2,490, eee 1,960, eee Gross profit 1,07e,eee 1,126, 80e Expenses: Operating expenses 965, eee 868, eee Depreciation expense 48,888 32,000 Loss on sale of land 9,000 Interest expense 23, eee 20,880 Income tax expense 9,000 58,888 Total expenses 1,037,000 987, e8e Net income $ 33,880 $ 139,000 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2022 2021 2020 $ 216,080 90,000 140,wee 15,000 $196, eee 91,980 115, eee 13,000 $154,900 70,000 145, eee 7,200 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 115,888 310, eee 310, eee (124,889) $1,272,888 115,80 220,000 280,000 (84,980) $946,880 e 250,00 220, eee (52,880) $794,280 161, wee 12,080 13,000 $ 76,000 8,000 2e, eee $ 91,800 4,000 15,880 450, eee 295, eee 235, eee 310,eee 126,000 $1,272,080 310,000 237, eee $946,000 310,eee 139, 280 $794,200 Problem 12-6A Part 1 Required: 1. Calculate the following risk ratios for 2021 and 2022: (Round your answers to 1 decimal place.) 2021 2022 times times times times Receivables turnover ratio Inventory turnover ratio Current ratio Debt to equity ratio to 1 to 1 96 96 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 2821 Net sales $3,560,eee $3,686,000 Cost of goods sold 2, 490,80 1,960,800 Gross profit 1,270,000 1,126,eee Expenses : Operating expenses 965,880 868, eee Depreciation expense 40,000 32,800 Loss on sale of land 9,80 Interest expense 23,000 28,888 Income tax expense 9,000 58,00 Total expenses 1,037, eee 987, e8e Net income $ 33,000 $ 139, eee VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2022 2021 2020 216, see 90, eee 140, eee 15, eee $196, eee 91,800 115,880 13,089 $154,800 70,eee 145, eee 7,280 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 115, eee 310,000 31e, eee (124,980) $1,272,000 115,980 220,000 280,000 (84, eee) $946, 080 @ 250,000 220,000 (52,980) $794,200 $ 161,880 12, eee 13,000 $ 76,880 8,800 20,800 $ 91,eee 4,000 15, eee 450, eee 295, eee 235,800 310, eee 126,000 $1,272,880 310, eee 237,080 $946,000 310,000 139, 280 $794,200 Problem 12-6A Part 1 Required: 1. Calculate the following risk ratios for 2021 and 2022: (Round your answers to 1 decimal place.) 2021 2022 times Receivables turnover ratio Inventory turnover ratio Current ratio times times times to 1 to 1 Debt to equity ratio 96
