Income statement and balance sheet data for Virtual Gaming Systems are provided below.

Required:
1. Calculate the following risk ratios for 2015 and 2016:
a. Receivables turnover ratio.
b. Inventory turnover ratio.
c. Current ratio.
d. Debt to equity ratio.
2. Calculate the following profitability ratios for 2015 and 2016:
a. Gross profit ratio.
b. Return on assets.
c. Profit margin.
d. Asset turnover.
3. Based on the ratios calculated, determine whether overall risk and profitability improved from 2015 to2016.

VIRTUAL GAMING SYSTEMS Income Statements For the years ended December 31 2016 2015 Net sales Cost of goods sold 3,560,000 2,490,000 1,070,000 3,086,000 1,960,000 1,126,000 Gross proft Operating expenses 965,000 40,000 868,000 32,000 9,000 20,000 58,000 Depreciation expense Loss on sale of land Interest expense Income tax expense 23,000 9,000 1,037,000 $ 33,000 Total expenses Net income 139,000 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2016 2015 2014 Assets Current assets: 216,000 196,000 $154,000 Cash Accounts receivable Inventory Prepaid rent 90,000 140,000 15,000 91,000 115,000 13,000 70,000 145,000 7,200 Long-term assets: Investment in bonds Land Equipment Less: Accumulated depreciation 115,000 220,000 280,000 124000) (84,000) (2,000) $946.000 115,000 310,000 310,000 250,000 220,000 Total assets $1.072000 $794200 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable $161,000 76,000 $137,200 4,000 15,000 12,000 8,000 13,000 450,000 310,000 20,000 295,000 310,000 Long-term liabilities: Notes payable 235,000 Stockholders' equity: Common stock Retained eanings 310,000 93,000 126,000 237,000 Total liabilities and stockholders' equity $1072000 946,000 $794200