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:

      

      

Compute the return on investment (ROI) for Alyeska Services Company. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)

     

  Sales $ 17,300,000     Net operating income $ 5,900,000   Average operating assets $ 36,600,000   Required: 1. Compute the margin for Alyeska Services Company. (Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)

      

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 to 2 decimal places. Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)

     

Explanation / Answer

1 Margin = Net operating income/Sales = 5900000/17300000= 34.10% 2 Turnover = Sales/Average operating assets = 17300000/36600000= 0.47 3 ROI = Margin*Turnover = 34.10%*0.47= 16.03%

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