Financial data for Joel de Paris, Inc., for last year follow: The company paid d

Question

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

     The company paid dividends of $281,560 last year. The “Investment in Buisson, S.A.,” on the balance sheet represents an investment in the stock of another company.

Compute the company’s margin, turnover, and return on investment (ROI) for last year. (Round your answers to 2 decimal places.)

Margin

Turnover

ROI

The board of directors of Joel de Paris, Inc., has set a minimum required rate of return of 21%. What was the company’s residual income last year?

Net operating income

Minimum required return

Residual income

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

Explanation / Answer

Beginning operating assets=2564000-394000-250000= $1920000 Ending operating assets=2640000-432000-248000= $1960000 Average operating assets=(1920000+1960000)/2= $1940000 1 Margin= Net operating income/Sales=725560/4268000= 17% Turnover=Sales/Average operating assets=4268000/1940000= 2.2 ROI = Margin*Turnover = 17%*2.2 = 37.4% 2 Net operating income 725560 Minimum required return 407400 =1940000*21% Residual income 318160

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.