Question

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

Joel de Paris, Inc. Balance Sheet
	Beginning Balance			Ending Balance
Assets
Cash	$	126,000		$	135,000
Accounts receivable		338,000			486,000
Inventory		568,000			472,000
Plant and equipment, net		798,000			777,000
Investment in Buisson, S.A.		394,000			426,000
Land (undeveloped)		249,000			247,000
Total assets	$	2,473,000		$	2,543,000
Liabilities and Stockholders' Equity
Accounts payable	$	372,000		$	343,000
Long-term debt		1,022,000			1,022,000
Stockholders' equity		1,079,000			1,178,000
Total liabilities and stockholders' equity	$	2,473,000		$	2,543,000

Joel de Paris, Inc. Income Statement
Sales					$	4,440,000
Operating expenses						3,818,400
Net operating income						621,600
Interest and taxes:
Interest expense	$	119,000
Tax expense		210,000				329,000
Net income					$	292,600

The company paid dividends of $193,600 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