Question

Financial data for Joel de Paris, Inc., for last year follow:

Joel de Paris, Inc. Balance Sheet
	Beginning Balance			Ending Balance
Assets
Cash	$	137,000		$	140,000
Accounts receivable		336,000			472,000
Inventory		571,000			479,000
Plant and equipment, net		846,000			839,000
Investment in Buisson, S.A.		405,000			430,000
Land (undeveloped)		251,000			251,000
Total assets	$	2,546,000		$	2,611,000
Liabilities and Stockholders' Equity
Accounts payable	$	384,000		$	339,000
Long-term debt		962,000			962,000
Stockholders' equity		1,200,000			1,310,000
Total liabilities and stockholders' equity	$	2,546,000		$	2,611,000

Joel de Paris, Inc. Income Statement
Sales					$	4,966,000
Operating expenses						4,221,100
Net operating income						744,900
Interest and taxes:
Interest expense	$	117,000
Tax expense		205,000				322,000
Net income					$	422,900

The company paid dividends of $312,900 last year. The “Investment in Buisson, S.A.,” on the balance sheet represents an investment in the stock of another company. The company's minimum required rate of return of 15%.

Required:

1. Compute the company's average operating assets for last year.

2. Compute the company’s margin, turnover, and return on investment (ROI) for last year. (Round "Margin", "Turnover" and "ROI" to 2 decimal places.)

3. What was the company’s residual income last year?

Answer 1