Financial data for Joel de Paris, Inc., for last year follow Joel de Paris, Inc
ID: 2522388 • Letter: F
Question
Financial data for Joel de Paris, Inc., for last year follow Joel de Paris, Inc Balance Sheet Beginning Ending Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A 138.000 126,000 349,000 483,000 567,000 478,000 806,000 813,000 391,000 428,000 253,000 251,000 2,504,000 $2,579,000 390.000 339.000 1,036,000 1,036,000 1,078,000 1,204,000 Accounts payable Long-term debt Stockholders equity Total liablities and stockhoiders' equity $2,504,000 $2,579.000 Joel de Paris, Inc. 4,136,000 Operating expenses 3,639.680 496.320 198,000 312,000 s 184,320 Net operating income interest expense Net income The company paid dividends of $58,320 last year The "Investment in Buisson, S.A sheet represents an investment in the stock of another company. on the balanceExplanation / Answer
1.Margin,Turnover,ROI
Margin = 12%
Turnover = 2.20
ROI = 26.40%
Beginning Balances
Ending Balances
Cash
138000
126000
Accounts receivable
349000
483000
Inventory
567000
478000
Plant and equipment (net)
806000
813000
Total operating assets
1860000
1900000
Average operating assets = ($1860000 + $1900000) / 2 = $1880000
1a-Margin = Net operating income / Sales
= $496320 / $4136000
= 12%
1b-Turnover =Sales / Average operating assets
= $4136000 / $1880000
= 2.20
1c-ROI = Margin × Turnover= 12% x 2.20 = 26.40%
2. Residual Income
Net operating income $4,96,320
Less : Minimum required return $3,76,000
($1880000 x 20%)
Residual income $1,20,320
Beginning Balances
Ending Balances
Cash
138000
126000
Accounts receivable
349000
483000
Inventory
567000
478000
Plant and equipment (net)
806000
813000
Total operating assets
1860000
1900000
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