The company paid dividends of $216,500 last year. The “Investment in Buisson, S.
ID: 2468750 • Letter: T
Question
The company paid dividends of $216,500 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.)
The board of directors of Joel de Paris, Inc., has set a minimum required rate of return of 20%. What was the company’s residual income last year?
Financial data for Joel de Paris, Inc., for last year follow:
Explanation / Answer
Companys Margin= Net Income*100/ Revenue 315500*100/4850000 6.50% Company`s Margin is 6.50 % Turnover = Revenue/Average Total Assets Average total assets= 2575000+2635000/2 2605000 Turnover = 4850000/2605000 1.861804 The turnover is 1.86 Return on investment = Net Profit*100/ investment 315000*100/430000 73% Residual income 430000*20% 86000 Income 315000