Question

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

Joel de Paris, Inc. Balance Sheet
	Beginning Balance			Ending Balance
Assets
Cash	$	136,000		$	130,000
Accounts receivable		348,000			475,000
Inventory		578,000			486,000
Plant and equipment, net		788,000			799,000
Investment in Buisson, S.A.		398,000			428,000
Land (undeveloped)		253,000			246,000
Total assets	$	2,501,000		$	2,564,000
Liabilities and Stockholders' Equity
Accounts payable	$	389,000		$	341,000
Long-term debt		983,000			983,000
Stockholders' equity		1,129,000			1,240,000
Total liabilities and stockholders' equity	$	2,501,000		$	2,564,000

Joel de Paris, Inc. Income Statement
Sales					$	4,862,000
Operating expenses						4,278,560
Net operating income						583,440
Interest and taxes:
Interest expense	$	113,000
Tax expense		196,000				309,000
Net income					$	274,440

The company paid dividends of $163,440 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