Question
[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
[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 year ended December 31
2019 | 2018 | |
Net sales | 3,470,000 | 2,996,000 |
Cost of goods sold | 2,472,000 | 1,942,000 |
Gross Profit | 998,000 | 1,054,000 |
Expenses: | ||
Operating Expenses | 947,000 | 850,000 |
Depreciation expenses | 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 | 990,200 | 935,200 |
Net income | 7,800 | 118,800 |
VIRTUAL GAMING SYSTEMS
Balance Sheets
December 31
2019 | 2018 | 2017 | |
Assets | |||
Current assets: | |||
Cash | 197,000 | 178,000 | 136,000 |
Accounts receivable | 71,000 | 73,000 | 52,000 |
Inventory | 121,000 | 97,000 | 127,000 |
Prepaid rent | 13,200 | 11,200 | 5,040 |
Long-term assets: | |||
Investment bonds | 97,000 | 97,000 | 0 |
Land | 292,000 | 202,000 | 232,000 |
Equipment | 292,000 | 262,000 | 202,000 |
Less: Accumulated depreciation | (79,000) | (57,000) | (34,000) |
Total Assets | 1,004,200 | 863,200 | 720,040 |
Liabilities and Stockholders' Equity | |||
Current Liabilities: | |||
Accounts Payable | 264,600 | 58,000 | 93,640 |
Interest Payable | 6,600 | 4,400 | 2,200 |
Income tax payable | 11,200 | 11,000 | 13,200 |
Long-term liabilities: | |||
Notes payable | 320,000 | 277,000 | 217,000 |
Stockholders' equity: | |||
Common stock | 292,000 | 292,000 | 292,000 |
Retained earnings | 109,800 | 220,800 | 102,000 |
Total liabilities and stockholders' equity | 1,004,200 | 863,200 | 720,040 |
Required:
1. Calculate the following risk ratios for 2018 and 2019: (Round your answers to 1 decimal place.)
Receivables turnover ratio
Inventory turnover ratio
Current ratio
Debt to equity ratio
2. Calculate the following profitability ratios for 2018 and 2019: (Round your answers to 1 decimal place.)
Gross profit ratio
Return on assets
Profit margin
Asset turnover
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