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VIRTUAL GAMING SYSTEMS Income Statements For the years ended December 31 2022 2021 Net sales $3,470,000 $2,996,000 Cost of go
Problem 12-6A Part 2 2. Calculate the following profitability ratios for 2021 and 2022: (Round your answers to 1 decimal plac
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Answer:

Gross Profit Ratio = Gross Profit / Net Sales

2022 = 998000 / 3470000 = 28.76%

2021 = 1054000 / 2996000 = 35.8%

Return on Assets = Net Income / Avg. Total Assets

2022 = 7800 / ( 1004200 + 863200 ) / 2 = 7800 / 933700 = 0.835%

2021 = 118800 / ( 863200 + 720040 ) / 2 = 118800 / 791620 = 15%

Profit Margin = Net Income / Net Sales

2022 = 7800 / 3470000 = 0.225%

2021 = 118800 / 2996000 = 3.97%

Asset Turnover = Sales / Avg. Total Assets

2022 = 3470000 / 933700 = 3.72 Times

2021 = 2996000 / 791620 = 3.78 Times

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