Question

Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash $ 127,000 $ 125,000 Accounts receivable 332,000 479,000 Inventory 572,000 486,000 Plant and equipment, net 829,000 810,000 Investment in Buisson, S.A. 397,000 435,000 Land (undeveloped) 245,000 248,000 Total assets $ 2,502,000 $ 2,583,000 Liabilities and Stockholders' Equity Accounts payable $ 385,000 $ 338,000 Long-term debt 1,022,000 1,022,000 Stockholders' equity 1,095,000 1,223,000 Total liabilities and stockholders' equity $ 2,502,000 $ 2,583,000 Joel de Paris, Inc. Income Statement Sales $ 3,948,000 Operating expenses 3,276,840 Net operating income 671,160 Interest and taxes: Interest expense $ 125,000 Tax expense 195,000 320,000 Net income $ 351,160 The company paid dividends of $223,160 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

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