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	$	128,000		$	134,000
Accounts receivable		338,000			485,000
Inventory		573,000			475,000
Plant and equipment, net		841,000			826,000
Investment in Buisson, S.A.		409,000			433,000
Land (undeveloped)		253,000			247,000
Total assets	$	2,542,000		$	2,600,000
Liabilities and Stockholders' Equity
Accounts payable	$	387,000		$	336,000
Long-term debt		987,000			987,000
Stockholders' equity		1,168,000			1,277,000
Total liabilities and stockholders' equity	$	2,542,000		$	2,600,000

Joel de Paris, Inc. Income Statement
Sales					$	4,560,000
Operating expenses						3,921,600
Net operating income						638,400
Interest and taxes:
Interest expense	$	125,000
Tax expense		207,000				332,000
Net income					$	306,400

The company paid dividends of $197,400 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?