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 s 18,000,000 s6,200,000 $ 35,900,000 1. Compute the margin for Alyeska Services Company. (Round your answer to 2 decimal places) 2. Com mpute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.) 3. Compute the return on investment (RO) for Alyeska Services Company (Round your intermediate calculations and final answer to 2 decimal places.)

Explanation / Answer

Answer 1.

Margin = Net Operating Income / Sales
Margin = $6,200,000 / $18,000,000
Margin = 34.44%

Answer 2.

Turnover = Sales / Average Operating Assets
Turnover = $18,000,000 / $35,900,000
Turnover = 0.50

Answer 3.

Return on Investment = Margin * Turnover
Return on Investment = 34.44% * 0.50
Return on Investment = 17.22%

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