Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc

Question

Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc Balance Sheet Beginning Balance Ending Balance Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A Land (undeveloped) Total assets $ 132,000 137,000 478,000 478,000 797,000 427,000 249,000 s 2,497,000 2,566,000 339,000 568,000 811,000 392,000 255,000 Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity Total liabilities and stockholders equity $ 389,000 336,000 1,035,000 1,073,000 1,195,000 $ 2,497,000 2,566,000 1,035,0e0

Explanation / Answer

1 Beginning operating assets=2497000-392000-255000= $1850000 Ending operating assets=2566000-427000-249000= $1890000 Average operating assets=(1850000+1890000)/2 = $1870000 2 Margin = Net operating income/Sales = 762960/4488000= 17% Turnover = Sales/Average operating assets = 4488000/1870000= 2.4 ROI = Margin*Turnover = 17%*2.4= 40.8% 3 Residaul income = 762960-(1870000*15%)= $482460

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