Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash $ 138,000 $ 133,000 Accounts receivable 335,000 486,000 Inventory 567,000 483,000 Plant and equipment, net 850,000 828,000 Investment in Buisson, S.A. 410,000 430,000 Land (undeveloped) 248,000 246,000 Total assets $ 2,548,000 $ 2,606,000 Liabilities and Stockholders' Equity Accounts payable $ 389,000 $ 341,000 Long-term debt 975,000 975,000 Stockholders' equity 1,184,000 1,290,000 Total liabilities and stockholders' equity $ 2,548,000 $ 2,606,000 Joel de Paris, Inc. Income Statement Sales $ 4,584,000 Operating expenses 3,942,240 Net operating income 641,760 Interest and taxes: Interest expense $ 113,000 Tax expense 208,000 321,000 Net income $ 320,760 The company paid dividends of $214,760 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%.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 19P

See similar textbooks

Related questions

Question

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

Joel de Paris, Inc. Balance Sheet
	Beginning Balance		Ending Balance
Assets
Cash	$	138,000		$	133,000
Accounts receivable		335,000			486,000
Inventory		567,000			483,000
Plant and equipment, net		850,000			828,000
Investment in Buisson, S.A.		410,000			430,000
Land (undeveloped)		248,000			246,000
Total assets	$	2,548,000		$	2,606,000
Liabilities and Stockholders' Equity
Accounts payable	$	389,000		$	341,000
Long-term debt		975,000			975,000
Stockholders' equity		1,184,000			1,290,000
Total liabilities and stockholders' equity	$	2,548,000		$	2,606,000

Joel de Paris, Inc. Income Statement
Sales			$	4,584,000
Operating expenses				3,942,240
Net operating income				641,760
Interest and taxes:
Interest expense	$	113,000
Tax expense		208,000		321,000
Net income			$	320,760

The company paid dividends of $214,760 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. (Round "Margin", "Turnover" and "ROI" to 2 decimal places.)

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

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.