Income statement and balance sheet data for Virtual Gaming Systems are provided below. VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31 2016 Net sales Cost of goods sold Gross profit Expenses: Net income Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense Total expenses Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Total assets 2015 $3,540,000 $3,066,000 2,486,000 1,956,000 1,054,000 1,110,000 961,000 864,000 36,000 30,000 0 8,600 21,000 18,000 8,600 51,000 1,026,600 971,600 $ 27,400 $ 138,400 Investment in bonds Land Equipment Less: Accumulated depreciation Liabilities and Stockholders' Equity Current liabilities: VIRTUAL GAMING SYSTEMS Balance Sheet December 31 Receivables turnover ratio Inventory turnover ratio Current ratio Debt to equity ratio Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity. Common stock Retained earnings Total liabilities and stockholders' equity 2015 2016 times times to 1 % $ 210,000 84,000 134,000 14,600 111,000 306,000 306,000 (114,000) $1,051,600 $ 139,800 10,800 12,600 460,000 306,000 122,400 $1,051,600 2016 2015 times times to 1 % $192,000 87,000 111,000 12,600 111,000 216,000 276,000 (78.000) $927,600 $72,000 7,200 18,000 291,000 306,000 233,400 $927,600 2014 $150,000 66,000 141,000 6,720 equired: Calculate the following risk ratios for 2015 and 2016: (Round your answers to 1 decimal place.) 0 246,000 216,000 (48,000) $777,720 $127,520 3,600 14,600 231,000 306.000 95,000 $777,720 Calculate the following profitability ratios for 2015 and 2016: (Round your answers to 1 decimal place)
Income statement and balance sheet data for Virtual Gaming Systems are provided below. VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31 2016 Net sales Cost of goods sold Gross profit Expenses: Net income Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense Total expenses Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Total assets 2015 $3,540,000 $3,066,000 2,486,000 1,956,000 1,054,000 1,110,000 961,000 864,000 36,000 30,000 0 8,600 21,000 18,000 8,600 51,000 1,026,600 971,600 $ 27,400 $ 138,400 Investment in bonds Land Equipment Less: Accumulated depreciation Liabilities and Stockholders' Equity Current liabilities: VIRTUAL GAMING SYSTEMS Balance Sheet December 31 Receivables turnover ratio Inventory turnover ratio Current ratio Debt to equity ratio Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity. Common stock Retained earnings Total liabilities and stockholders' equity 2015 2016 times times to 1 % $ 210,000 84,000 134,000 14,600 111,000 306,000 306,000 (114,000) $1,051,600 $ 139,800 10,800 12,600 460,000 306,000 122,400 $1,051,600 2016 2015 times times to 1 % $192,000 87,000 111,000 12,600 111,000 216,000 276,000 (78.000) $927,600 $72,000 7,200 18,000 291,000 306,000 233,400 $927,600 2014 $150,000 66,000 141,000 6,720 equired: Calculate the following risk ratios for 2015 and 2016: (Round your answers to 1 decimal place.) 0 246,000 216,000 (48,000) $777,720 $127,520 3,600 14,600 231,000 306.000 95,000 $777,720 Calculate the following profitability ratios for 2015 and 2016: (Round your answers to 1 decimal place)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please do not give solution in image format thanku
![Problem 12-6A Use ratios to analyze risk and profitability (LO3, 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 Statement
For the year ended December 31
2016
$3,540,000
2,486,000
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
Assets
Current assets:
Cash
Accounts receivable
Inventory
Prepaid rent
Long-term assets:
Total assets
Investment in bonds
Land
Equipment
Less: Accumulated depreciation
Liabilities and Stockholders' Equity
Current liabilities:
1,054,000
961,000
36,000
864,000
30,000
8,600
18,000
51,000
1,026,600
971,600
$ 27,400 $ 138,400
Receivables turnover
ratio
Inventory turnover ratio
Current ratio
Debt to equity ratio
Accounts payable
Interest payable
Income tax payable
Long-term liabilities:
Notes payable
Stockholders' equity:
Common stock
Retained earnings
Total liabilities and stockholders' equity
Gross profit ratio
Return on assets
Profit margin
Asset turnover
0
21,000
8,600
VIRTUAL GAMING SYSTEMS
Balance Sheet
December 31
2015
2015
$3,066,000
1,956,000
1,110,000
2015
times
times
to 1
%
%
%
%
times
2016
$ 210,000
84,000
134,000
14,600
2016
111,000
306,000
306,000
(114,000)
$1,051,600
$ 139,800
10,800
12,600
460,000
306,000
122,400
$1,051,600
2016
Required:
1. Calculate the following risk ratios for 2015 and 2016: (Round your answers to 1 decimal place.)
2015
times
times
to 1
%
%
%
%
times
$192,000
87,000
111,000
12,600
111,000
216,000
276,000
(78,000)
$927,600
$ 72,000
7,200
18,000
291,000
306,000
233,400
$927,600
2014
2. Calculate the following profitability ratios for 2015 and 2016: (Round your answers to 1 decimal
place.)
$150,000
66,000
141,000
6,720
0
246,000
216,000
(48,000)
$777,720
$127,520
3,600
14,600
231,000
306,000
95,000
$777,720](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F349709f6-3e99-49ce-9384-9f2b79e0bb19%2Ff131b838-10d4-41d7-b03c-246a89ec9615%2F70jt9dj_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 12-6A Use ratios to analyze risk and profitability (LO3, 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 Statement
For the year ended December 31
2016
$3,540,000
2,486,000
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
Assets
Current assets:
Cash
Accounts receivable
Inventory
Prepaid rent
Long-term assets:
Total assets
Investment in bonds
Land
Equipment
Less: Accumulated depreciation
Liabilities and Stockholders' Equity
Current liabilities:
1,054,000
961,000
36,000
864,000
30,000
8,600
18,000
51,000
1,026,600
971,600
$ 27,400 $ 138,400
Receivables turnover
ratio
Inventory turnover ratio
Current ratio
Debt to equity ratio
Accounts payable
Interest payable
Income tax payable
Long-term liabilities:
Notes payable
Stockholders' equity:
Common stock
Retained earnings
Total liabilities and stockholders' equity
Gross profit ratio
Return on assets
Profit margin
Asset turnover
0
21,000
8,600
VIRTUAL GAMING SYSTEMS
Balance Sheet
December 31
2015
2015
$3,066,000
1,956,000
1,110,000
2015
times
times
to 1
%
%
%
%
times
2016
$ 210,000
84,000
134,000
14,600
2016
111,000
306,000
306,000
(114,000)
$1,051,600
$ 139,800
10,800
12,600
460,000
306,000
122,400
$1,051,600
2016
Required:
1. Calculate the following risk ratios for 2015 and 2016: (Round your answers to 1 decimal place.)
2015
times
times
to 1
%
%
%
%
times
$192,000
87,000
111,000
12,600
111,000
216,000
276,000
(78,000)
$927,600
$ 72,000
7,200
18,000
291,000
306,000
233,400
$927,600
2014
2. Calculate the following profitability ratios for 2015 and 2016: (Round your answers to 1 decimal
place.)
$150,000
66,000
141,000
6,720
0
246,000
216,000
(48,000)
$777,720
$127,520
3,600
14,600
231,000
306,000
95,000
$777,720
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