Question

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

Joel de Paris, Inc. Balance Sheet
	Beginning Balance			Ending Balance
Assets
Cash	$	131,000		$	134,000
Accounts receivable		334,000			488,000
Inventory		578,000			471,000
Plant and equipment, net		867,000			857,000
Investment in Buisson, S.A.		394,000			433,000
Land (undeveloped)		255,000			247,000
Total assets	$	2,559,000		$	2,630,000
Liabilities and Stockholders' Equity
Accounts payable	$	374,000		$	347,000
Long-term debt		1,045,000			1,045,000
Stockholders' equity		1,140,000			1,238,000
Total liabilities and stockholders' equity	$	2,559,000		$	2,630,000

Joel de Paris, Inc. Income Statement
Sales					$	5,211,000
Operating expenses						4,585,680
Net operating income						625,320
Interest and taxes:
Interest expense	$	119,000
Tax expense		204,000				323,000
Net income					$	302,320

The company paid dividends of $204,320 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