Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc.Balance Sheet BeginningBalance EndingBalanceAssetsCash$129,000 $137,000 Accounts receivable 336,000 477,000 Inventory 580,000 488,000 Plant and equipment, net 875,000 858,000 Investment in Buisson, S.A. 406,000 431,000 Land (undeveloped) 252,000 251,000 Total assets$2,578,000 $2,642,000 Liabilities and Stockholders' EquityAccounts payable$387,000 $331,000 Long-term debt 1,039,000 1,039,000 Stockholders' equity 1,152,000 1,272,000 Total liabilities and stockholders' equity$2,578,000 $2,642,000 Joel de Paris, Inc.Income Statement Sales $4,850,000 Operating expenses 4,122,500 Net operating income 727,500 Interest and taxes: Interest expense$121,000 Tax expense 208,000 329,000 Net income $398,500 The company paid dividends of $278,500 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 company’s margin, turnover, and return on investment (ROI) for last year. (Do not round intermediate calculations and round your final answers to 2 decimal places.)3. What was the company’s residual income last year?

Average operating assets :— It is the average of assets that is used in operation of the business.…

Answered: Required: 1. Compute the company's…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 19P

See similar textbooks

Related questions

Question

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		$	137,000
Accounts receivable		336,000			477,000
Inventory		580,000			488,000
Plant and equipment, net		875,000			858,000
Investment in Buisson, S.A.		406,000			431,000
Land (undeveloped)		252,000			251,000
Total assets	$	2,578,000		$	2,642,000
Liabilities and Stockholders' Equity
Accounts payable	$	387,000		$	331,000
Long-term debt		1,039,000			1,039,000
Stockholders' equity		1,152,000			1,272,000
Total liabilities and stockholders' equity	$	2,578,000		$	2,642,000

Joel de Paris, Inc. Income Statement
Sales			$	4,850,000
Operating expenses				4,122,500
Net operating income				727,500
Interest and taxes:
Interest expense	$	121,000
Tax expense		208,000		329,000
Net income			$	398,500

The company paid dividends of $278,500 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 company’s margin, turnover, and return on investment (ROI) for last year. (Do not round intermediate calculations and round your final answers to 2 decimal places.)

3. What was the company’s residual income last year?

Expert Solution

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.