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	$	134,000		$	130,000
Accounts receivable		349,000			483,000
Inventory		573,000			478,000
Plant and equipment, net		864,000			869,000
Investment in Buisson, S.A.		397,000			425,000
Land (undeveloped)		251,000			254,000
Total assets	$	2,568,000		$	2,639,000
Liabilities and Stockholders' Equity
Accounts payable	$	380,000		$	345,000
Long-term debt		1,000,000			1,000,000
Stockholders' equity		1,188,000			1,294,000
Total liabilities and stockholders' equity	$	2,568,000		$	2,639,000

Joel de Paris, Inc. Income Statement
Sales					$	4,462,000
Operating expenses						3,703,460
Net operating income						758,540
Interest and taxes:
Interest expense	$	110,000
Tax expense		209,000				319,000
Net income					$	439,540

The company paid dividends of $333,540 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?