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 Net operating income Average operating assets $ 19,000,000 $ 5,600,000 $ 36,000,000 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.) 1. Margin 2. Turnover 3. ROI

Explanation / Answer

1. Margin = Net operating income / Sales = $5,600,000 / $19,000,000 = 29.47%

2. Turnover = Sales / Average operating assets = $19,000,000 / $36,000,000 = 0.53

3. ROI = Margin x Turnover = 29.47% x 0.53 = 15.62%

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