PROBLEM 11-17 Return on Investment (ROI) and Residual Income LO11-1, LO11-2Financial data for Joel de Paris, Inc., for last year follow:Joel de Paris, Inc.Balance SheetBeginningEndingBalanceBalanceAssetsCash$ 140,000$ 120,000Accounts receivable450,000530,000Inventory320,000380,000Plant and equipment, net680,000620,000Investment in Buisson, S.A.280,000170,000250,000Land (undeveloped)180,000Total assets$2,020,000$2,100,000Liabilities and Stockholders' EquityAccounts payable.$ 360,000$ 310,000Long-term debtStockholders' equity1,500,0001,500,000160,000290,000Total liabilities and stockholders' equity$2,020,000$2,100,000Joel de Paris, Inc.Income StatementSales$4,050,000Operating expensesNet operating income3,645,000405,000Interest and taxes:Interest expense$150,000Таx expense110,000260,000Net income$ 145,000Thecompany paid dividends of $15,000 last year. The "Investment in Buisson, S.A.," on thebalance sheet represents an investment in the stock of another company. The company's minimumrequired rate of return of 15%. Required:1. Compute the company's average operating assets for last year.2. Compute the company's margin, turnover, and return on investment (ROI) for last year.(Hint: Should you use net income or net operating income in your calculations?)3.What was the company's residual income last year?

Accounting Ratios: Accounting Ratios are the financial ratios through which a company can analyze…

Required: 1. Compute the company's average operating assets for last year. 2. Compute the company's margin, turnover, and return on investment (ROI) for last year. (Hint: Should you use net income or net operating income in your calculations?) 3. What was the company's residual income last year?

Required: 1. Compute the company's average operating assets for last year. 2. Compute the company's margin, turnover, and return on investment (ROI) for last year. (Hint: Should you use net income or net operating income in your calculations?) 3. What was the company's residual income last year?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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