Required Information 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 Cost of goods sold Gross profit Expenses Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense Total expenses Net income 2025 2024 $3,051,000 $3,525,000 2,483,000 1,953,000 1,042,000 1,098,000 958,000 861,000 33,000 28,500 0 8,300 19,500 16,500 8,300 49,500 1,018,800 963,800 134,200 23,200 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 $205,500 79,500 129,500 $189,000 $147,000 84,000 63,000 108,000 138,000 14,300 12,300 6,360 108,000 108,000 303,000 213,000 243,000 303,000 273,000 213,000 Less: Accumulated depreciation (106,500) (73,500) (45,000) Total assets $1,036,300 $913,800 $765,360 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $161,400 Interest payable Income tax payable Long-term liabilities: Notes payable 9,900 12,300 $69,000 6,600 16,500 $120,260 $3,300 14,300 430,000 280,000 228,000 Stockholders' equity: Common stock 303,000 303,000 303,000 Retained earnings 119,700 230,700 96,500 Total liabilities and stockholders' equity $1,036,300 $913,800 $765,360 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.) 2024 2025 Gross profit ratio % % Return on assets % % Profit margin % % Asset turnover times times