Question

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

Joel de Paris, Inc. Balance Sheet
	Beginning Balance			Ending Balance
Assets
Cash	$	128,000		$	128,000
Accounts receivable		343,000			483,000
Inventory		574,000			480,000
Plant and equipment, net		795,000			789,000
Investment in Buisson, S.A.		408,000			428,000
Land (undeveloped)		254,000			251,000
Total assets	$	2,502,000		$	2,559,000
Liabilities and Stockholders' Equity
Accounts payable	$	383,000		$	343,000
Long-term debt		975,000			975,000
Stockholders' equity		1,144,000			1,241,000
Total liabilities and stockholders' equity	$	2,502,000		$	2,559,000

Joel de Paris, Inc. Income Statement
Sales					$	4,836,000
Operating expenses						4,110,600
Net operating income						725,400
Interest and taxes:
Interest expense	$	115,000
Tax expense		190,000				305,000
Net income					$	420,400

The company paid dividends of $323,400 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?

	1. Average operating assets 2. Margin % Turnover ROI % 3. Residual income

Answer 1