Question

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

Joel de Paris, Inc. Balance Sheet
	Beginning Balance			Ending Balance
Assets
Cash	$	125,000		$	127,000
Accounts receivable		346,000			484,000
Inventory		574,000			484,000
Plant and equipment, net		835,000			825,000
Investment in Buisson, S.A.		399,000			427,000
Land (undeveloped)		253,000			245,000
Total assets	$	2,532,000		$	2,592,000
Liabilities and Stockholders' Equity
Accounts payable	$	383,000		$	336,000
Long-term debt		1,031,000			1,031,000
Stockholders' equity		1,118,000			1,225,000
Total liabilities and stockholders' equity	$	2,532,000		$	2,592,000

Joel de Paris, Inc. Income Statement
Sales					$	4,560,000
Operating expenses						3,830,400
Net operating income						729,600
Interest and taxes:
Interest expense	$	122,000
Tax expense		202,000				324,000
Net income					$	405,600

The company paid dividends of $298,600 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