Question

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

Joel de Paris, Inc. Balance Sheet
	Beginning Balance			Ending Balance
Assets
Cash	$	130,000		$	133,000
Accounts receivable		336,000			475,000
Inventory		574,000			481,000
Plant and equipment, net		870,000			861,000
Investment in Buisson, S.A.		409,000			427,000
Land (undeveloped)		247,000			255,000
Total assets	$	2,566,000		$	2,632,000
Liabilities and Stockholders' Equity
Accounts payable	$	377,000		$	339,000
Long-term debt		988,000			988,000
Stockholders' equity		1,201,000			1,305,000
Total liabilities and stockholders' equity	$	2,566,000		$	2,632,000

Joel de Paris, Inc. Income Statement
Sales					$	4,632,000
Operating expenses						4,076,160
Net operating income						555,840
Interest and taxes:
Interest expense	$	118,000
Tax expense		197,000				315,000
Net income					$	240,840

The company paid dividends of $136,840 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