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Financial data for Joel de Paris Inc. for last year follow: JOEL DE PARIS INC. Balance Sheet Ending Balance Beginning Balance Assets Cash $ 120,000
Financial data for Joel de Paris Inc. for last year follow:
JOEL DE PARIS INC. | |||||
Balance Sheet | |||||
Ending Balance | Beginning Balance | ||||
Assets | |||||
Cash | $ | 120,000 | $ | 140,000 | |
Accounts receivable | 530,000 | 450,000 | |||
Inventory | 380,000 | 320,000 | |||
Plant and equipment, net | 620,000 | 680,000 | |||
Investment in Buisson, S.A. | 280,000 | 250,000 | |||
Land (undeveloped) | 170,000 | 180,000 | |||
Total assets | $ | 2,100,000 | $ | 2,020,000 | |
Liabilities and Shareholders Equity | |||||
Accounts payable | $ | 310,000 | $ | 360,000 | |
Long-term debt | 1,500,000 | 1,500,000 | |||
Shareholders equity | 290,000 | 160,000 | |||
Total liabilities and shareholders equity | $ | 2,100,000 | $ | 2,020,000 | |
JOEL DE PARIS INC. | |||||
Income Statement | |||||
Sales | $ | 4,050,000 | |||
Less: Operating expenses | 3,645,000 | ||||
Net operating income | 405,000 | ||||
Less: Interest and taxes: | |||||
Interest expense | $ | 150,000 | |||
Tax expense | 110,000 | 260,000 | |||
Net income | $ | 145,000 | |||
The company paid dividends of $15,000 last year. The Investment in Buisson, S.A. on the balance sheet represents an investment in the shares of another company.
Required: 1. Compute the companys margin, turnover, and ROI for last year. (Do not round intermediate calculations. Round "Turnover" answer to 1 decimal place.)
2. The board of directors of Joel de Paris Inc. has set a minimum required return of 15%. What was the companys residual income last year?
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