Reference no: EM132453827

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

Joel de Paris, Inc. Balance Sheet

Beginning Balance Ending Balance

Assets Cash$128,000 $133,000

Accounts receivable 330,000 477,000

Inventory 572,000 477,000

Plant and equipment, net 810,000 793,000

Investment in Buisson, S.A. 391,000 427,000

Land (undeveloped) 252,000 250,000

Total assets$2,483,000 $2,557,000

Liabilities and Stockholders' Equity

Accounts payable $374,000 $334,000

Long-term debt 1,048,000 1,048,000

Stockholders' equity 1,061,000 1,175,000

Total liabilities and stockholders' equity$2,483,000 $2,557,000

Joel de Paris, Inc. Income Statement

Sales $4,836,000

Operating expenses 4,062,240

Net operating income 773,760

Interest and taxes:

Interest expense $124,000

Tax expense 198,000 322,000

Net income $451,760

The company paid dividends of $337,760 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?