Question

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

Joel de Paris, Inc. Balance Sheet
	Beginning Balance			Ending Balance
Assets
Cash	$	126,000		$	127,000
Accounts receivable		349,000			490,000
Inventory		567,000			478,000
Plant and equipment, net		848,000			835,000
Investment in Buisson, S.A.		404,000			432,000
Land (undeveloped)		252,000			251,000
Total assets	$	2,546,000		$	2,613,000
Liabilities and Stockholders' Equity
Accounts payable	$	378,000		$	338,000
Long-term debt		978,000			978,000
Stockholders' equity		1,190,000			1,297,000
Total liabilities and stockholders' equity	$	2,546,000		$	2,613,000

Joel de Paris, Inc. Income Statement
Sales					$	5,157,000
Operating expenses						4,538,160
Net operating income						618,840
Interest and taxes:
Interest expense	$	123,000
Tax expense		191,000				314,000
Net income					$	304,840

The company paid dividends of $197,840 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