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 $ 17,500,000 Net operating income $ 5,400,000 Average operating assets $ 36,700,000 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 = Operating income*100/Sales = 5400000*100/17500000 = 30.86%

2) Turnover = Sales/Operating assets = 17500000/36700000 = 0.48

3) ROI = Operating income*100/operating assets = 5400000*100/36700000 = 14.71%

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