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	$	132,000	$	127,000
Accounts receivable		330,000		471,000
Inventory		578,000		488,000
Plant and equipment, net		830,000		824,000
Investment in Buisson, S.A.		408,000		426,000
Land (undeveloped)		252,000		246,000
Total assets	$	2,530,000	$	2,582,000
Liabilities and Stockholders' Equity
Accounts payable	$	382,000	$	332,000
Long-term debt		1,019,000		1,019,000
Stockholders' equity		1,129,000		1,231,000
Total liabilities and stockholders' equity	$	2,530,000	$	2,582,000

Joel de Paris, Inc. Income Statement
Sales		$	4,914,000
Operating expenses			4,176,900
Net operating income			737,100
Interest and taxes:
Interest expense	$ 124,000
Tax expense	210,000		334,000
Net income		$	403,100

The company paid dividends of $301,100 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 answers to 2 decimal places.)

2.	The board of directors of Joel de Paris, Inc., has set a minimum required rate of return of 14%. What was the companys residual income last year?