Reference no: EM132849969

Question - Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc.

Balance Sheet

Beginning balance / Ending balance

Assets

Cash$135,000 / $137,000

Accounts receivable 346,000 / 490,000

Inventory 570,000 / 483,000

Plant and equipment, net 859,000 / 840,000

Investment in Buisson, S.A. 397,000 / 434,000

Land (undeveloped) 250,000 / 251,000

Total assets $2,557,000 / $2,635,000

Liabilities and Stockholders' Equity

Accounts payable$390,000 / $345,000

Long-term debt 1,021,000 / 1,021,000

Stockholders' equity 1,146,000 / 1,269,000

Total liabilities and stockholders' equity $2,557,000 / $2,635,000

Joel de Paris, Inc. Income Statement

Sales $4,246,000

Operating expenses 3,694,020

Net operating income 551,980

Interest and taxes:

Interest expense $113,000

Tax expense 192,000 305,000

Net income $246,980

The company paid dividends of $123,980 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.

3. What was the company's residual income last year?