The following income statement and balance sheet for Virtual Gaming Systems are provided. Earnings per share for the year ended December 31, 2012, are $1.00. The closing stock price on December 31, 2012, is $28.00.
VIRTUAL GAMING SYSTEMS
Income Statement
For the year ended December 31, 2012
Sales revenue $3,051,000
Cost of goods sold 1,969,000
Gross profit 1,082,000
Expenses:
Operating expenses 869,000
Depreciation expense 42,000
Loss on sale of land 9,000
Interest expense 16,900
Income tax expense 49,400
Total expenses 986,300
Net income $ 95,700
VIRTUAL GAMING SYSTEMS
Balance Sheet
December 31
2012 2011
Assets
Current assets:
Cash $ 190,000 $ 157,000
Accounts receivable 97,000 74,000
Inventory 106,000 146,000
Prepaid rent 12,000 8,000
Long-term assets:
Investment in bonds 129,000 0
Land 220,000 250,000
Equipment 239,000 181,000
Less: Accumulated depreciation (71,000) (29,000)
Total assets $ 922,000 $ 787,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 67,000 $ 81,000
Interest payable 6,000 23,000
Income tax payable 19,000 29,000
Long-term liabilities:
Notes payable 292,000 237,000
Stockholders' equity:
Common stock 303,000 281,000
Retained earnings 235,000 136,000
Total liabilities and stockholdersâ equity $ 922,000 $ 787,000
Required:
Calculate the following profitability ratios for 2012. (Round your answers to 1 decimal place. Omit the "%" sign in your response.)
Profitability Ratios
1. Gross profit ratio %
2. Return on assets %
3. Profit margin %
4. Asset turnover times
5. Return on equity %
6. Price-earnings ratio times
The following income statement and balance sheet for Virtual Gaming Systems are provided. Earnings per share for the year ended December 31, 2012, are $1.00. The closing stock price on December 31, 2012, is $28.00.
VIRTUAL GAMING SYSTEMS
Income Statement
For the year ended December 31, 2012
Sales revenue $3,051,000
Cost of goods sold 1,969,000
Gross profit 1,082,000
Expenses:
Operating expenses 869,000
Depreciation expense 42,000
Loss on sale of land 9,000
Interest expense 16,900
Income tax expense 49,400
Total expenses 986,300
Net income $ 95,700
VIRTUAL GAMING SYSTEMS
Balance Sheet
December 31
2012 2011
Assets
Current assets:
Cash $ 190,000 $ 157,000
Accounts receivable 97,000 74,000
Inventory 106,000 146,000
Prepaid rent 12,000 8,000
Long-term assets:
Investment in bonds 129,000 0
Land 220,000 250,000
Equipment 239,000 181,000
Less: Accumulated depreciation (71,000) (29,000)
Total assets $ 922,000 $ 787,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 67,000 $ 81,000
Interest payable 6,000 23,000
Income tax payable 19,000 29,000
Long-term liabilities:
Notes payable 292,000 237,000
Stockholders' equity:
Common stock 303,000 281,000
Retained earnings 235,000 136,000
Total liabilities and stockholdersâ equity $ 922,000 $ 787,000
Required:
Calculate the following profitability ratios for 2012. (Round your answers to 1 decimal place. Omit the "%" sign in your response.)
Profitability Ratios
1. Gross profit ratio %
2. Return on assets %
3. Profit margin %
4. Asset turnover times
5. Return on equity %
6. Price-earnings ratio times
