! Required information Problem 12-6A (Algo) Use ratios to analyze risk and profitability (LO12-3, 12-4) [The...

 

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! Required information Problem 12-6A (Algo) Use ratios to analyze risk and profitability (LO12-3, 12-4) [The following information applies to the questions displayed below.] Income statements and balance sheets data for Virtual Gaming Systems are provided below. Net sales Cost of goods sold Gross profit Expenses: VIRTUAL GAMING SYSTEMS Income Statements For the Years Ended December 31 Operating expenses. Depreciation expense. Loss on sale of land Interest expense Income tax expense. Total expenses Net income 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 Problem 12-6A (Algo) Part 1 Receivables turnover ratio Inventory turnover ratio Current ratio Debt to equity ratio 2024 2025 $3,560,000 times times 2,490,000 1,070,000 % 965,000 40,000 0 Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings. Total liabilities and stockholders' equity. 23,000 9,000 1,037,000 33,000 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2025 2024 $3,086,000 1,960,000 1,126,000 times times % 868,000 32,000 9,000 20,000 53,000 982,000 144,000 2025 $216,000 90,000 140,000 15,000 115,000 310,000 310,000 (124,000) $1,072,000 $111,000 12,000 13,000 500,000 310,000 126,000 $1,072,000 2024 $196,000 91,000 115,000 13,000 115,000 220,000 280,000 (84,000) $946,000 $76,000 8,000 20,000 295,000 310,000 237,000 $946,000 2023 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.) $154,000 70,000 145,000 7,200 0 250,000 220,000 (52,000) $794,200 $137,200 4,000 15,000 235,000 310,000 93,000 $794,200 Problem 12-6A (Algo) Part 2 2. Calculate the following profitability ratios for 2024 and 2025: (Round your answers to 1 decimal place.) Gross profit ratio Return on assets Profit margin Asset turnover 2024 % % times 2025 % % % times ! Required information Problem 12-6A (Algo) Use ratios to analyze risk and profitability (LO12-3, 12-4) [The following information applies to the questions displayed below.] Income statements and balance sheets data for Virtual Gaming Systems are provided below. Net sales Cost of goods sold Gross profit Expenses: VIRTUAL GAMING SYSTEMS Income Statements For the Years Ended December 31 Operating expenses. Depreciation expense. Loss on sale of land Interest expense Income tax expense. Total expenses Net income 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 Problem 12-6A (Algo) Part 1 Receivables turnover ratio Inventory turnover ratio Current ratio Debt to equity ratio 2024 2025 $3,560,000 times times 2,490,000 1,070,000 % 965,000 40,000 0 Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings. Total liabilities and stockholders' equity. 23,000 9,000 1,037,000 33,000 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2025 2024 $3,086,000 1,960,000 1,126,000 times times % 868,000 32,000 9,000 20,000 53,000 982,000 144,000 2025 $216,000 90,000 140,000 15,000 115,000 310,000 310,000 (124,000) $1,072,000 $111,000 12,000 13,000 500,000 310,000 126,000 $1,072,000 2024 $196,000 91,000 115,000 13,000 115,000 220,000 280,000 (84,000) $946,000 $76,000 8,000 20,000 295,000 310,000 237,000 $946,000 2023 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.) $154,000 70,000 145,000 7,200 0 250,000 220,000 (52,000) $794,200 $137,200 4,000 15,000 235,000 310,000 93,000 $794,200 Problem 12-6A (Algo) Part 2 2. Calculate the following profitability ratios for 2024 and 2025: (Round your answers to 1 decimal place.) Gross profit ratio Return on assets Profit margin Asset turnover 2024 % % times 2025 % % % times