ezto.mheducation.com Chapter 9 Homework Financial Data For Joel De For Last Ques

Question

ezto.mheducation.com Chapter 9 Homework Financial Data For Joel De For Last Question 1 (of 2) Save & Exit Submit 30.00 points Financial data for Joel de Paris, Inc., for last year follow Joel de Paris, Inc. Balance Sheet Beginning Ending Balance Balance Assets Cash $ 137,000 S 133,000 347,000475,000 577,000 480,000 839,000 852,000 401,000 430,000 252,000 253,000 Plant and equipment, net Investment in Buisson, S.A Land (undeveloped) Total assets $2,553,000 $2,623,000 Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity S 384,000 S 348,000 1,034,000 1,034,000 1,135,000 1,241,000 Total liabilities and stockholders' equity $2,553,000 $2,623,000 Joel de Paris, Inc. Income Statement Sales S 4,032,000 3,386,880 645,120 Net operating income Interest and taxes: $ 116,000 Interest expense Tax expense 5,000 311,000 Net income S 334,120 The company paid dividends of $228,120 last year. The "Investment in Buisson, S.A.on the balance sheet represents an investment in the stock of another company.

Explanation / Answer

Beginning operating assets=2553000-401000-252000= $1900000 Ending operating assets=2623000-430000-253000= $1940000 Average operating assets = (1900000+1940000)/2 = $1920000 1 Margin = Net operating income/Sales = 645120/4032000= 16% Turnover = Sales/Average operating assets = 4032000/1920000= 2.1 ROI = Margin*Turnover = 16%*2.1= 33.6% 2 Net operating income 645120 Minimum required return 345600 =1920000*18% Residual income 299520

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