hw 12.2

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	$	132,000
Accounts receivable		347,000		484,000
Inventory		564,000		474,000
Plant and equipment, net		810,000		800,000
Investment in Buisson, S.A.		393,000		435,000
Land (undeveloped)		254,000		253,000
Total assets	$	2,497,000	$	2,578,000
Liabilities and Stockholders' Equity
Accounts payable	$	384,000	$	332,000
Long-term debt		1,020,000		1,020,000
Stockholders' equity		1,093,000		1,226,000
Total liabilities and stockholders' equity	$	2,497,000	$	2,578,000

Joel de Paris, Inc. Income Statement
Sales		$	4,675,000
Operating expenses			3,973,750
Net operating income			701,250
Interest and taxes:
Interest expense	119,000
Tax expense	199,000		318,000
Net income		$	383,250

The company paid dividends of $250,250 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 company's margin, turnover, and return on investment (ROI) for last year. (Round your answers to 1 decimal place.) 96 Turnover times ROI 2. The board of directors of Joel de Paris, Inc., has set a minimum required rate ofreturn of22%. What was the company's residual income last year Net operating income Minimum required return Residual income