The following income statement and balance sheet for Virtual Gaming Systems are

Question

The following income statement and balance sheet for Virtual Gaming Systems are provided. Earnin share for the year ended December 31, 2012, are $1.00. The closing stock price on December 31, 2012, is $28.00 gs per VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2012 Sales revenue Cost of goods sold $3,056,000 1,968,000 Gross profit 1,088,000 Expenses Operating expenses Depreciation expense Loss on sale of land Interest expense Income tax expense 869,000 41,000 10,000 16,100 49,100 Total expenses 985,200 Net income $102,800

Explanation / Answer

1.Gross profit ratio: Gross profit/sales

=1088000/3056000*100

=35.60

2.Return on assets: Return/ Average of assets

=102800/(760000+902000/2)*100

=102800/1662000/2*100

=102800/831000*100

=12.37

3.Profit margin= Net income /Net sales

=102800/902000*100

=11.39

4. Asset turnover= sales /Asset

=3056000/902000

=3.38

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