Got this question wrong, please help! Financial data for Joel de Paris, Inc., fo

Question

Got this question wrong, please help! Financial data for Joel de Paris, Inc., for last year follow Joel de Paris, Inc. Balance Sheet Beginning Ending Balance Balance $ 134,000 135,000 40,000 482,000 562,000 485,000 804,000 778,000 391,000 426,000 247,000 250,000 Accounts receivable Plant and equipment, net Investment in Buisson, S.A Land (undeveloped) Total assets $2,478,000 $2,556,000 Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity $ 387,000 $ 338,000 978,000 978,000 1,113,000 1,240,000 Total liabilities and stockholders' equity $2,478,000 $2,556,000 Joel de Paris, Inc. Income Statement $ 4,092,000 3.478,200 Operating expenses 613,800 Net operating income Interest and taxes: $ 112,000 Interest expense Tax expense 192,000 304,000 Net income $ 309,800

Explanation / Answer

Average operating Assets = 1880000+1840000 /2

= 1860000

Margin = Net operating Income/ Sales

       = 613800 / 4092000

    =15%

Turnover = Sales / Average operating Assets

                = 4092000 /1860000

              =2.2

ROI = Margin x Turnover

   = 15% *2.2

=33

Requirement 2

Margin 15% Turnover 2.2 Return On investment 33%

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