Alyeska Services Company, a division of a major oil company, provides various se

Question

Alyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below:

Required:

1. Compute the margin for Alyeska Services Company. (Round your answer to 2 decimal places.)

2. Compute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.)

3. Compute the return on investment (ROI) for Alyeska Services Company. (Round your intermediate calculations and final answer to 2 decimal places.)

Sales $ 17,700,000 Net operating income $ 4,900,000 Average operating assets $ 35,700,000

Explanation / Answer

1.margin for Alyeska services company:=net operating income / sales *100

=>$4,900,000/17,700,000 *100

=>27.68%.

2.turnover = sales / average operating assets

=>17,700,000 / 35,700,000

=>0.50......(rounded to 2 decimals).

3.return on investment = margin * turnover=>37.68%*0.50.

=>13.84%.

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