Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Also, calculate the debt to equity ratio for year 2021 and 2022.
Transcribed Image Text:2. Calculate the following profitability ratios for 2021 and 2022: (Round your answers to 1 decimal place.)
2021
2022
Gross profit ratio
%
%
Return on assets
Profit margin
%
Asset turnover
3.7 times
3.7 times
Transcribed Image Text:VIRTUAL GAMING SYSTEMS
Income Statements
For the years ended December 31
2022
2021
Net sales
$3,500,000 $3,026,000
2,478,000
1,022,000
1,948,000
1,078,000
Cost of goods sold
Gross profit
Expenses:
Operating expenses
Depreciation expense
Loss on sale of land
Interest expense
Income tax expense
Total expenses
953,000
28,000
17,000
7,800
1,005,800
$
856,000
26,000
7,800
14,000
47,000
950,800
16, 200 $ 127,200
Net income
VIRTUAL GAMING SYSTEMS
Balance Sheets
December 31
2022
2021
2020
Assets
Current assets:
Cash
$ 200,000
74,000
124,000
13,800
$184,000 $142,000
79,000
103,000
11,800
58,000
133,000
5,760
Accounts receivable
Inventory
Prepaid rent
Long-term assets:
Investment in bonds
Land
103,000
298,000
298,000
(94,000) (66,000)
103,000
208,000
268,000
238,000
208,000
(40,000)
Equipment
Less: Accumulated depreciation
Total assets
$1,016,800 $890,800 $744,760
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
Interest payable
Income tax payable
Long-term liabilities:
Notes payable
Stockholders' equity:
Common stock
$ 203,400
8,400
11,800
$ 64,000
5,600
14,000
$108,160
2,800
13,800
380,000
283,000
223,000
298,000
115,200
$1,016,800 $890,800
298,000
226,200
298,000
99,000
$744,760
Retained earnings
Total liabilities and stockholders' equity
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