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 $18,200,000 $5,300,000 $35,100,000 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).) Margin 2. Compute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.) Turnover 3. Compute the return on investment (ROl) 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).) ROI

Explanation / Answer

a) Margin = Net operating income*100/sales

               = 5300000*100/18200000

Margin = 29.12%

b) Turnover = Sales/Average operating assets

                 = 18200000/35100000

Turnover = 0.52

3) ROI = Net operating income*100/Average operating assets

           = 5300000*100/35100000

ROI = 15.10%

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