Question

Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A. Land (undeveloped) Total assets Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity Total liabilities and stockholders' equity 131,000 334,000 560,000 865,000 407,000 251,000 $ 2,548,000 $ 135,000 480,000 470,000 845,000 433,000 247,000 $ 2,610,000 $ 383,000 973,000 1,192,000 $ 2,548,000 $ 332,000 973,000 1,305,000 $2,610,000 Joel de Paris, Inc. Income Statement Sales Operating expenses Net operating income Interest and taxes: Interest expense $ 128,000 Tax expense 207,000 Net income $ 4,584,000 3,988,080 595,920 335,000 260,920 $ The company paid dividends of $147,920 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%.

Answer 1

Answers Average Operating Assets Margin Assets Turnover ratio: ROI Residual Income 1910000 13.00% 2.40 31.20% 309420 Cash Accounts Receivables Inventory Plant and Equipment Total Operating Assets Beginning Ending 131000 135000 334000 480000 560000 470000 865000 845000 1890000 1930000 Question 1 Average Operating Assets 1910000 Sales Average Opearating Assets Net operating income Minimum Required Rate of Return DATA 4584000 1910000 595920 15.00%

Sales Question -2 Margin : Net operating Income / Net sales Net operating income 5959201 Sales 4584000 Margin 13.00% Assets Turnover ration: Netsales Average Opearating Assets 4584000 Average Opearating Assets 1910000 Assets Turnover ratio : 2.40 ROI: Margin * Asset Turnover ratio Margin 13.00% Assets Turnover ratio : ROI: Margin * Asset Turnover ratio 31.20% Question - 3 Residual Income 2.4 Average Operating Assets Minimum Required Rate of Return Minimum Required Return Net Operating income Residual income 1910000 15% 286500 595920 309420