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 $ 18,700,000  
  Net operating income $ 5,600,000
  Average operating assets $ 36,300,000  

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.)

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Explanation / Answer

1) Margin = Net operating income / sales = $ 5,600,000 / 18,700,000 = 29.94%

2) Turnover = Sales = $ 18,700,000

3) ROI = Net operating income / Average operating asset = $ 5,600,000 / $ 36,300,000 = 15.43%

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