eBook

Print

References

Check my workCheck My Work button is now enabled

Item 9

Financial data for Joel de Paris, Incorporated, for last year follow:

Joel de Paris, Incorporated Balance Sheet
	Beginning Balance	Ending Balance
Assets
Cash	$ 132,000	$ 135,000
Accounts receivable	338,000	484,000
Inventory	576,000	475,000
Plant and equipment, net	854,000	846,000
Investment in Buisson, S.A.	401,000	431,000
Land (undeveloped)	245,000	251,000
Total assets	$ 2,546,000	$ 2,622,000
Liabilities and Stockholders' Equity
Accounts payable	$ 381,000	$ 346,000
Long-term debt	952,000	952,000
Stockholders' equity	1,213,000	1,324,000
Total liabilities and stockholders' equity	$ 2,546,000	$ 2,622,000

Joel de Paris, Incorporated Income Statement
Sales		$ 4,608,000
Operating expenses		4,055,040
Net operating income		552,960
Interest and taxes:
Interest expense	$ 114,000
Tax expense	203,000	317,000
Net income		$ 235,960

The company paid dividends of $124,960 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 15%.

Required:

Compute the company's average operating assets for last year.

Compute the companys margin, turnover, and return on investment (ROI) for last year.

Note: Round "Margin", "Turnover" and "ROI" to 2 decimal places.

What was the companys residual income last year?