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		$	127,000
Accounts receivable		349,000			481,000
Inventory		574,000			475,000
Plant and equipment, net		851,000			857,000
Investment in Buisson, S.A.		396,000			429,000
Land (undeveloped)		253,000			246,000
Total assets	$	2,549,000		$	2,615,000
Liabilities and Stockholders' Equity
Accounts payable	$	370,000		$	330,000
Long-term debt		997,000			997,000
Stockholders' equity		1,182,000			1,288,000
Total liabilities and stockholders' equity	$	2,549,000		$	2,615,000

Joel de Paris, Inc. Income Statement
Sales					$	5,376,000
Operating expenses						4,623,360
Net operating income						752,640
Interest and taxes:
Interest expense	$	121,000
Tax expense		192,000				313,000
Net income					$	439,640

The company paid dividends of $333,640 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