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 $ 18,400,000 Net operating income $ 5,900,000 Average operating assets $ 36,800,000 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 / Sales *100

= $  5,900,000 / $ 18,400,000 *100

= 32.07%

2. turnover = Sales / Average Operating Assets

= $ 18,400,000/ $ 36,800,000

= 0.50

3. ROI = Margin * Turnover

= 32.07% * 0.5

= 16.03%

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