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		$	127,000
Accounts receivable		337,000			487,000
Inventory		562,000			487,000
Plant and equipment, net		827,000			799,000
Investment in Buisson, S.A.		403,000			431,000
Land (undeveloped)		246,000			246,000
Total assets	$	2,509,000		$	2,577,000
Liabilities and Stockholders' Equity
Accounts payable	$	381,000		$	344,000
Long-term debt		1,044,000			1,044,000
Stockholders' equity		1,084,000			1,189,000
Total liabilities and stockholders' equity	$	2,509,000		$	2,577,000

Joel de Paris, Inc. Income Statement
Sales					$	4,888,000
Operating expenses						4,105,920
Net operating income						782,080
Interest and taxes:
Interest expense	$	128,000
Tax expense		199,000				327,000
Net income					$	455,080

The company paid dividends of $350,080 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