! Required information [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 Years Ended December 31 2025 Net sales 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 2024 $3,530,000 $3,056,000 2,484,000 1,954,000 1,046,000 1,102,000 959,000 862,000 34,000 29,000 0 8,400 20,000 17,000 8,400 50,000 1,021,400 966,400 135,600 24,600 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 $207,000 81,000 $190,000 85,000 $148,000 64,000 131,000 109,000 139,000 14,400 12,400 6,480 109,000 109,000 0 304,000 214,000 244,000 304,000 274,000 214,000 Less: Accumulated depreciation (109,000) (75,000) (46,000) Total assets $1,041,400 $918,400 $769,480 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $154,200 $70,000 $122,680 Interest payable 10,200 Income tax payable 12,400 6,800 17,000 3,400 14,400 Long-term liabilities: Notes payable 440,000 289,000 229,000 Stockholders' equity: Common stock 304,000 304,000 304,000 Retained earnings 120,600 231,600 96,000 Total liabilities and stockholders' equity $1,041,400 $918,400 $769,480 2. Calculate the following profitability ratios for 2024 and 2025: (Round your answers to 1 decimal place.) Answer is not complete. 2024 2025 Gross profit ratio 36.1 % 29.6 % Return on assets % 2.4 % Profit margin 4.4 % 0.7 % Asset turnover times 3.4 times