Question

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

 Financial data for Joel de Paris, Inc., for last year follow:
 Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash \$ 130,000 \$ 132,000 Accounts receivable 336,000 476,000 Inventory 561,000 475,000 Plant and equipment, net 893,000 877,000 Investment in Buisson, S.A. 394,000 432,000 Land (undeveloped) 250,000 248,000 Total assets \$ 2,564,000 \$ 2,640,000 Liabilities and Stockholders' Equity Accounts payable \$ 383,000 \$ 338,000 Long-term debt 1,039,000 1,039,000 Stockholders' equity 1,142,000 1,263,000 Total liabilities and stockholders' equity \$ 2,564,000 \$ 2,640,000
 Joel de Paris, Inc. Income Statement Sales \$ 4,268,000 Operating expenses 3,542,440 Net operating income 725,560 Interest and taxes: Interest expense \$ 125,000 Tax expense 198,000 323,000 Net income \$ 402,560
 The company paid dividends of \$281,560 last year. The “Investment in Buisson, S.A.,” on the balance sheet represents an investment in the stock of another company.
 Required: 1. Compute the company’s margin, turnover, and return on investment (ROI) for last year. (Round your answers to 2 decimal places.) Margin Turnover ROI
 2. The board of directors of Joel de Paris, Inc., has set a minimum required rate of return of 21%. What was the company’s residual income last year? Net operating income Minimum required return Residual income

 Beginning operating assets=2564000-394000-250000= \$1920000 Ending operating assets=2640000-432000-248000= \$1960000 Average operating assets=(1920000+1960000)/2= \$1940000 1 Margin= Net operating income/Sales=725560/4268000= 17% Turnover=Sales/Average operating assets=4268000/1940000= 2.2 ROI = Margin*Turnover = 17%*2.2 = 37.4% 2 Net operating income 725560 Minimum required return 407400 =1940000*21% Residual income 318160

#### Earn Coins

Coins can be redeemed for fabulous gifts.