Question

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

Joel de Paris, Inc. Balance Sheet
	Beginning Balance			Ending Balance
Assets
Cash	$	135,000		$	136,000
Accounts receivable		337,000			475,000
Inventory		573,000			487,000
Plant and equipment, net		865,000			852,000
Investment in Buisson, S.A.		401,000			426,000
Land (undeveloped)		250,000			253,000
Total assets	$	2,561,000		$	2,629,000
Liabilities and Stockholders' Equity
Accounts payable	$	376,000		$	337,000
Long-term debt		986,000			986,000
Stockholders' equity		1,199,000			1,306,000
Total liabilities and stockholders' equity	$	2,561,000		$	2,629,000

Joel de Paris, Inc. Income Statement
Sales					$	3,860,000
Operating expenses						3,203,800
Net operating income						656,200
Interest and taxes:
Interest expense	$	117,000
Tax expense		192,000				309,000
Net income					$	347,200

The company paid dividends of $240,200 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