Question

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

Joel de Paris, Inc. Balance Sheet
	Beginning Balance			Ending Balance
Assets
Cash	$	134,000		$	129,000
Accounts receivable		335,000			482,000
Inventory		562,000			486,000
Plant and equipment, net		849,000			823,000
Investment in Buisson, S.A.		405,000			435,000
Land (undeveloped)		252,000			246,000
Total assets	$	2,537,000		$	2,601,000
Liabilities and Stockholders' Equity
Accounts payable	$	371,000		$	331,000
Long-term debt		997,000			997,000
Stockholders' equity		1,169,000			1,273,000
Total liabilities and stockholders' equity	$	2,537,000		$	2,601,000

Joel de Paris, Inc. Income Statement
Sales					$	5,130,000
Operating expenses						4,360,500
Net operating income						769,500
Interest and taxes:
Interest expense	$	125,000
Tax expense		202,000				327,000
Net income					$	442,500

The company paid dividends of $338,500 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