Problem 11-15 Return on Investment (ROI) and Residual Income [LO11-1, LO11-2]

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

Joel de Paris, Inc. Balance Sheet
	Beginning Balance			Ending Balance
Assets
Cash	$	127,000		$	136,000
Accounts receivable		338,000			486,000
Inventory		567,000			471,000
Plant and equipment, net		888,000			867,000
Investment in Buisson, S.A.		400,000			427,000
Land (undeveloped)		251,000			255,000
Total assets	$	2,571,000		$	2,642,000
Liabilities and Stockholders' Equity
Accounts payable	$	379,000		$	331,000
Long-term debt		1,017,000			1,017,000
Stockholders' equity		1,175,000			1,294,000
Total liabilities and stockholders' equity	$	2,571,000		$	2,642,000

Joel de Paris, Inc. Income Statement
Sales					$	5,432,000
Operating expenses						4,725,840
Net operating income						706,160
Interest and taxes:
Interest expense	$	122,000
Tax expense		208,000				330,000
Net income					$	376,160

The company paid dividends of $257,160 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 companys margin, turnover, and return on investment (ROI) for last year. (Round "Margin", "Turnover" and "ROI" to 2 decimal places.)

3. What was the companys residual income last year?