Question
Required information [The following information applies to the questions displayed below.] Income statements and balance sheets data for Virtual Gaming Systems are provided below.
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 Net sales Cost of goods sold Gross profit Expenses: 2025 $3,470,000 2024 $2,996,000 2,472,000 1,942,000 998,000 1,054,000 Operating expenses 947,000 850,000 Depreciation expense 22,000 23,000 Loss on sale of land 0 7,200 Interest expense 14,000 11,000 Income tax expense 7,200 44,000 Total expenses Net income 990,200 935,200 7,800 118,800 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 Less: Accumulated depreciation Total assets $197,000 $178,000 $136,000 71,000 73,000 52,000 121,000 97,000 127,000 13,200 11,200 5,040 97,000 97,000 292,000 202,000 232,000 292,000 262,000 202,000 (79,000) (57,000) (34,000) $1,004,200 Liabilities and Stockholders' Equity $863,200 $720,040 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 $264,600 $58,000 $93,640 6,600 4,400 2,200 11,200 11,000 13,200 320,000 277,000 217,000 292,000 292,000 292,000 109,800 $1,004,200 220,800 102,000 $863,200 $720,040 2. Calculate the following profitability ratios for 2024 and 2025: (Round your answers to 1 decimal place.) Gross profit ratio Return on assets Profit margin Asset turnover 2024 % 2025 % % % % % times times
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