Required information 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 @ 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 $196,000 $154, web 91,000 70,000 115,000 145, eeb 13,000 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 Stockholdel's. 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 90,000 140,000 15,800 115,000 310,000 319,000 (124.000) $1,072,000 115,000 220,000 280,000 (84,000) $946,000 250, eeb 220,000 (52, cob) $794,200 $ 161,000 12,000 13,000 $ 76,000 B.000 20,000 295,000 $ 91,00D 4,000 15,00 235,00 450,000 310,000 126,000 $1,872,000 310,000 232.000 $946,000 310, cep 139,200 $794,200 Required: 1. Calculate the following risk ratios for 2021 and 2022: (Round your answers to 1 decimal place.) Answer is complete but not entirely correct. +21 2022 Receivables turnover ratio 38.3 times 39.3 timos Inventory tumover ratio 15.1 times 19.5 times Current ratio 4.0 to 1 2.5 to 1 Debt to equity ratio 74.2 X % 145.9 % 2. Calculate the following profitability ratios for 2021 and 2022: (Round your answers to 1 decimal place.) Answer is complete but not entirely correct. 2022 30.1 Gross profit ratio Return on assets Profit margin Asset tumover 2021 36.5 % 14.7 X % 4.5 % 3.3 times % % 3.1 0.1 X % 3.3 times