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 $ 18,000,000 Net operating income $ 5,000,000 Average operating assets $ 36,600,000 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.)

Explanation / Answer

1. Margin = Net operating income*100/sales

               = 5000000*100/18000000

Margin = 27.78%

2) Turnover = Sales/Average operating assets

                 = 18000000/36600000

Turnover = 0.49

3) ROI = net operating income*100/average operating assets

           = 5000000*100/36600000

ROI = 13.66%

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