VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2018 Net sales Cost of goods sold $3,066,000 1,956,000 1,110,000 Gross profit Expenses: Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense $864,000 27,000 8,600 18,000 54,000 Total expenses 971,600 Net income $ 138,400 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2018 2017 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investment in bonds Land Equipment Less: Accumulated depreciation $192,000 87,000 111,000 12,600 $150,000 66,000 141,000 6,720 111,000 216,000 276,000 (75,000) 246,000 216,000 (48,000) Total assets $930,600 $777,720 $ 72,000 7,200 18,000 $ 121,520 3,600 14,600 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings 291,000 231,000 306,000 236,400 306,000 101,000 Total liabilities and stockholders' equity $930,600 $777,720 Earnings per share for the year ended December 31, 2018, are $1.30. The closing stock price on December 31, 2018, is $27.90. Required: Calculate the following profitability ratios for 2018. (Round your answers to 1 decimal place.) Profitability Ratios 1. % % Gross profit ratio Return on assets Profit margin Asset turnover Return on equity Price-earnings ratio 4. times