Tundra Services Company, a division of a major oil company, provides various ser

Question

Tundra 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:

  Sales

$

18,000,000  

  Net operating income

$

5,200,000

  Average operating assets

$

36,000,000  

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

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

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

Tundra 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:

Explanation / Answer

Basic Calculations Sales = 18000000 Net Operating Income = 5200000 Average Operating Assets = 360000000 1 Margin of the Tundra services company = Net Operating Income / Sales Margin of the Tundra services company = 5200000 / 18000000 Margin of the Tundra services company = 28.89% 2 Turnover of the Tundra services company = Sales / Average Operating Assets Turnover of the Tundra services company = 18000000 / 36000000 Turnover of the Tundra services company = 0.50 3 Return on Investment of the Tundra services company = Net Operating Income / Average Operating Assets Return on Investment of the Tundra services company = 5200000 / 36000000 Return on Investment of the Tundra services company = 14.44%

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