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Problem $12-6$A $($Algo$)$ Use ratios to analyze risk and profitability $($LO$12-3,12-4)$

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Income statements and balance sheets data for Virtual Gaming Systems are provided below.

VIRTUAL GAMING SYSTEMS

Income Statements

For the Years Ended December $31$

$20252024$

Net sales $$3,525,000$ $$3,051,000$

Cost of goods sold $2,483,0001,953,000$

Gross profit $1,042,0001,098,000$

Expenses:

Operating expenses $958,000861,000$

Depreciation expense $33,00028,500$

Loss on sale of land $08,300$

Interest expense $19,50016,500$

Income tax expense $8,30049,500$

Total expenses $1,018,800963,800$

Net income $23,200134,200$

VIRTUAL GAMING SYSTEMS

Balance Sheets

December $31$

$202520242023$

Assets

Current assets:

Cash $$205,500$ $$189,000$ $$147,000$

Accounts receivable $79,50084,00063,000$

Inventory $129,500108,000138,000$

Prepaid rent $14,30012,3006,360$

Long$-$term assets:

Investment in bonds $108,000108,0000$

Land $303,000213,000243,000$

Equipment $303,000273,000213,000$

Less: Accumulated depreciation $(106,500)(73,500)(45,000)$

Total assets $$1,036,300$ $$913,800$ $$765,360$

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $$161,400$ $$69,000$ $$120,260$

Interest payable $9,9006,6003,300$

Income tax payable $12,30016,50014,300$

Long$-$term liabilities:

Notes payable $430,000288,000228,000$

Stockholders' equity:

Common stock $303,000303,000303,000$

Retained earnings $119,700230,70096,500$

Total liabilities and stockholders$$ equity $$1,036,300$ $$913,800$ $$765,360$

Problem $12-6$A $($Algo$)$ Part $1$

Required:

$1.$ Assuming that all sales were on account, calculate the following risk ratios for $2024$ and $2025$: $($Round your answers to $1$ decimal place.$)$