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		$	132,000
Accounts receivable		332,000			480,000
Inventory		572,000			480,000
Plant and equipment, net		826,000			808,000
Investment in Buisson, S.A.		405,000			431,000
Land (undeveloped)		246,000			253,000
Total assets	$	2,511,000		$	2,584,000
Liabilities and Stockholders' Equity
Accounts payable	$	383,000		$	335,000
Long-term debt		977,000			977,000
Stockholders' equity		1,151,000			1,272,000
Total liabilities and stockholders' equity	$	2,511,000		$	2,584,000

Joel de Paris, Inc. Income Statement
Sales					$	4,512,000
Operating expenses						3,744,960
Net operating income						767,040
Interest and taxes:
Interest expense	$	120,000
Tax expense		195,000				315,000
Net income					$	452,040

The company paid dividends of $331,040 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