Tater Services Limited, a division of a major oil company, provides various serv
ID: 2493087 • Letter: T
Question
Tater Services Limited, a division of a major oil company, provides various services to the operators of an oil field in northern Alberta. Data concerning the most recent year are as follow:
Sales
12,000,000
Operating Income
3,600,000
Average Operating Assets
24,000,000
Required
Compute the margin for Tater Services Limited
Compute the turnover for Tater Services Limited
Compute the return on investment (ROI) for Tater Services Limited
Sales
12,000,000
Operating Income
3,600,000
Average Operating Assets
24,000,000
Explanation / Answer
1. the margin for Tater Services Limited= Operating Income / Sales = 3600000 / 12000000 = 30%
2. the turnover for Tater Services Limited= Sales / Average Operating Assets = 12000000 / 24000000 = 0.50
3. the return on investment (ROI) for Tater Services Limited= Operating Income / Average Operating Assets
= 3600000 / 24000000 = 15%
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