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		$	134,000
Accounts receivable		344,000			471,000
Inventory		576,000			476,000
Plant and equipment, net		815,000			819,000
Investment in Buisson, S.A.		409,000			429,000
Land (undeveloped)		252,000			250,000
Total assets	$	2,521,000		$	2,579,000
Liabilities and Stockholders' Equity
Accounts payable	$	379,000		$	343,000
Long-term debt		1,031,000			1,031,000
Stockholders' equity		1,111,000			1,205,000
Total liabilities and stockholders' equity	$	2,521,000		$	2,579,000

Joel de Paris, Inc. Income Statement
Sales					$	3,948,000
Operating expenses						3,434,760
Net operating income						513,240
Interest and taxes:
Interest expense	$	124,000
Tax expense		207,000				331,000
Net income					$	182,240

The company paid dividends of $88,240 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