Chapter 11 Question 3

Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Ending Balance Balance Assets Cash $ 135,000 125 ,000 Accounts receivable 336,000 472, 000 Inventory 562,000 473, 000 Plant and equipment, net 857,000 860, 000 Investment in Buisson, S.A. 404,000 432, 000 Land ( undeveloped) 250,000 253, 000 Total assets $ 2, 544, 000 $ 2, 615, 000 Liabilities and Stockholders' Equity Accounts payable $ 378, 000 $ 336, 000 Long-term debt 1, 013,000 1, 013, 000 Stockholders' equity 1, 153,000 1, 266,000 Total liabilities and stockholders' equity $ 2, 544,000 $ 2, 615, 000 Joel de Paris, Inc. Income Statement Sales $ 4,393, 000 Operating expenses 3, 646, 190 Net operating income 746, 810 Interest and taxes: Interest expense $ 118,000 Tax expense 199,000 317,000 Net income $ 429 , 810 ScreenshotThe company paid dividends of $316,810 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? 1 . Average operating assets 2. Margin % Turnover ROI % 3. Residual income