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	$	5,100,000
Average operating assets	$	35,500,000

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 1 3. ROI olo

Answer 1

Margin		27.42%
Turnover		0.52
Return on Investment (ROI)		14.37%
Workings:
Sales		$ 1,86,00,000
Net Operating income		$     51,00,000
Average Operating assets		$ 3,55,00,000
Margin	=	Net Operating income / Sales
	=	$5100000 / $18600000
	=	27.42%
Turnover	=	Sales / Average Operating assets
	=	$18600000 / $35500000
	=	0.52
Return on Investment (ROI)	=	Net Operating income / Average Operating assets
	=	$5100000 / $35500000
	=	14.37%