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

Required:

1. Calculate the following risk ratios for 2021 and 2022:

a. Receivables turnover ratio. c. Current ratio.

b. Inventory turnover ratio. d. Debt to equity ratio.

2. Calculate the following profitability ratios for 2021 and 2022:

a. Gross profit ratio. c. Profit margin.

b. Return on assets. d. Asset turnover.

3. Based on the ratios calculated, determine whether overall risk and profitability improved from 2021 to 2022.

VIRTUAL GAMING SYSTEMS Income Statements For the years ended December 31 2022 2021 $3,560,000 2,490,000 1,070,000 $3,086,000 1,960,000 1,126,000 Net sales Cost of goods sold Gross profit Expenses: Operating expenses Depreciation expense Loss on sale of land 965,000 868,000 40,000 32,000 9,000 Interest expense 23,000 9,000 20,000 Income tax expense 58,000 987,000 $ 139,000 Total expenses 1,037,000 2$ 33,000 Net income