Required Information Problem 12-6A (Static) Use ratios to analyze risk and profitability (LO12-3, 12-4) [The following Information applies to the questions displayed below.] Income statement and balance sheet data for Virtual Gaming Systems are provided below. VIRTUAL GAMING SYSTEMS Income Statements For the Years Ended December 31 Net sales Cost of goods sold Gross profit Expenses: Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense Total expenses Net income 2025 $ 3,560,000 2,490,000 1,070,000 965,000 40,000 8 23,000 9,000 1,037,000 2024 $ 3,086,000 1,960,000 1,126,000 868,000 32,000 9,000 $ 33,000 20,000 58,000 987,000 $ 139,000 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2025 2024 2023 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investment in bonds Land Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: $ 216,000 90,000 $ 196,000 $ 154,000 91,000 140,000 115,000 15,000 13,000 70,000 145,000 7,200 115,000 115,000 B 310,000 220,000 250,000 310,000 (124,000) $ 1,072,000 280,000 (84,000) $ 946,000 220,000 (52,000) $ 794,200 $ 161,000 12,000 13,000 $ 76,000 8,000 20,000 $ 91,000 4,000 15,000 450,000 295,000 235,000 Common stock Retained earnings 310,000 126,000 310,000 310,000 237,000 139,200 Total liabilities and stockholders' equity $ 1,072,000 $ 946,000 $ 794,200 Problem 12-6A (Static) 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.) Answer is complete but not entirely correct. 2024 2025 Receivables turnover ratio 38.3 times 39.3 times Inventory turnover ratio 15.8 times 19.5 times Current ratio Debt to equity ratio 4.0 2.50 73.0% 14.6 %