Question
Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash $ 129,000
Financial data for Joel de Paris, Inc., for last year follow:
Joel de Paris, Inc. Balance Sheet | ||||
Beginning Balance | Ending Balance | |||
Assets | ||||
Cash | $ | 129,000 | $ | 126,000 |
Accounts receivable | 340,000 | 476,000 | ||
Inventory | 565,000 | 473,000 | ||
Plant and equipment, net | 886,000 | 885,000 | ||
Investment in Buisson, S.A. | 404,000 | 428,000 | ||
Land (undeveloped) | 248,000 | 255,000 | ||
Total assets | $ | 2,572,000 | $ | 2,643,000 |
Liabilities and Stockholders' Equity | ||||
Accounts payable | $ | 387,000 | $ | 334,000 |
Long-term debt | 962,000 | 962,000 | ||
Stockholders' equity | 1,223,000 | 1,347,000 | ||
Total liabilities and stockholders' equity | $ | 2,572,000 | $ | 2,643,000 |
Joel de Paris, Inc. Income Statement | |||
Sales | $ | 4,656,000 | |
Operating expenses | 4,050,720 | ||
Net operating income | 605,280 | ||
Interest and taxes: | |||
Interest expense | $ 124,000 | ||
Tax expense | 199,000 | 323,000 | |
Net income | $ | 282,280 | |
The company paid dividends of $158,280 last year. The Investment in Buisson, S.A., on the balance sheet represents an investment in the stock of another company. |
Required: | |
1. | Compute the companys margin, turnover, and return on investment (ROI) for last year. (Round your Turnover answer to 1 decimal place. Round your Margin and ROI percentage answers to 1 decimal place (i.e 0.123 should be entered as 12.3.)) |
2. | The board of directors of Joel de Paris, Inc., has set a minimum required rate of return of 19%. What was the companys residual income last year? |
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