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: Sales Net operating income Average operating assets $18,100,000 $6,300,000 $36,600,000 Required: 1. Compute the margin for Alyeska Services Company. (Round your answer to 2 decimal places.) Margin 2. Compute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.) Turnover 3. Compute the return on investment (ROI) for Alyeska Services Company. (Round your intermediate calculations and final answer to 2 decimal places.) ROI

Explanation / Answer

1. Margin = Net operating income / Sales = $6,300,000 / $18,100,000 = 34.81%

2. Turnover = Sales / Average operating assets = $18,100,000 / $36,600,000 = 0.49

3. ROI = Margin x Turnover = 34.81% x 0.49 = 17.06%

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