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		$	139,000
Accounts receivable		330,000			474,000
Inventory		564,000			472,000
Plant and equipment, net		842,000			825,000
Investment in Buisson, S.A.		407,000			433,000
Land (undeveloped)		251,000			251,000
Total assets	$	2,528,000		$	2,594,000
Liabilities and Stockholders' Equity
Accounts payable	$	385,000		$	338,000
Long-term debt		1,013,000			1,013,000
Stockholders' equity		1,130,000			1,243,000
Total liabilities and stockholders' equity	$	2,528,000		$	2,594,000

Joel de Paris, Inc. Income Statement
Sales					$	4,536,000
Operating expenses						3,764,880
Net operating income						771,120
Interest and taxes:
Interest expense	$	121,000
Tax expense		193,000				314,000
Net income					$	457,120

The company paid dividends of $344,120 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