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 $ 18,600,000

Net operating income $ 6,200,000

Average operating assets $ 35,900,000

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 opertating income/sales=6200000/18600000 = 33.33%

2) Turnover = Sales/ Avg operating assets=18600000/35900000 = 0.52

3) ROI=Net operating income / Avg operating assets=6200000/35900000=17.27%

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