Financial data for Bridger, Inc., for last year are as follows:
Bridger, Inc.
Balance Sheet
Beginning Balance EndingBalance
Assets
Cash $ 126,000 $ 135,000
Accounts receivable 331,000 482,000
Inventory 571,000 480,000
Plant and equipment, net 882,000 853,000
Investment in Brier Company 408,000 425,000
Land (undeveloped) 251,000 247,000
Total assets $ 2,569,000 $ 2,622,000
Liabilities and Stockholders' Equity
Accounts payable $ 376,000 $ 332,000
Long-term debt 1,029,000 1,029,000
Stockholders' equity 1,164,000 1,261,000
Total liabilities and stockholders' equity $ 2,569,000 $ 2,622,000
Bridger, Inc.
Income Statement
Sales $ 4,825,000
Operating expenses 4,004,750
Net operating income 820,250
Interest and taxes:
Interest expense $ 121,000
Tax expense 201,000 322,000
Net income $ 498,250
The company paid dividends of $401,250 last year. The “Investment in Brier Company” on the balance sheet represents an investment in the stock of another company.
Required:
1.
Compute the company’s margin, turnover, and return on investment (ROI) for last year. (Round your intermediate calculations and final answers to 1 decimal place.)
Margin % 17
Turnover 2.21
ROI % 37.6
2. The board of directors of Bridger, Inc., has set a minimum required return of 17%. What was the company’s residual income last year?
Residual income $ 449,820
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The only answer I've gotten right is the Margin. I think I'm failing on how to get Avg Op Assets. I also don't know how dividends effects the assets, but I'm guessing it does?
Bridger, Inc.
Balance Sheet
Beginning Balance EndingBalance
Assets
Cash $ 126,000 $ 135,000
Accounts receivable 331,000 482,000
Inventory 571,000 480,000
Plant and equipment, net 882,000 853,000
Investment in Brier Company 408,000 425,000
Land (undeveloped) 251,000 247,000
Total assets $ 2,569,000 $ 2,622,000
Liabilities and Stockholders' Equity
Accounts payable $ 376,000 $ 332,000
Long-term debt 1,029,000 1,029,000
Stockholders' equity 1,164,000 1,261,000
Total liabilities and stockholders' equity $ 2,569,000 $ 2,622,000
Bridger, Inc.
Income Statement
Sales $ 4,825,000
Operating expenses 4,004,750
Net operating income 820,250
Interest and taxes:
Interest expense $ 121,000
Tax expense 201,000 322,000
Net income $ 498,250
The company paid dividends of $401,250 last year. The “Investment in Brier Company” on the balance sheet represents an investment in the stock of another company.
Required:
1.
Compute the company’s margin, turnover, and return on investment (ROI) for last year. (Round your intermediate calculations and final answers to 1 decimal place.)
Margin % 17
Turnover 2.21
ROI % 37.6
2. The board of directors of Bridger, Inc., has set a minimum required return of 17%. What was the company’s residual income last year?
Residual income $ 449,820
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The only answer I've gotten right is the Margin. I think I'm failing on how to get Avg Op Assets. I also don't know how dividends effects the assets, but I'm guessing it does?