Question

All applicaule erelis uses are available with McGraw-Hill's Connect Accounting. ERCISE 11-1 Compute the Return on Investment (ROI) (L011-1] Services Company, a division of a major oil company provides various services to the ors of the North Slope oil field in Alaska. Data concerning the most recent year appear below: Alyeska Services operators of the Sales ........ Net operating income ...... Average operating assets $7,500,000 $600,000 $5,000,000

Answer 1

1)

Net operating income Operating margin Sales

$600,000 Operating margin $7,500,000

Operating margin = 8%

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2)

Net sales Turnover of operating assets Operating assets

$7,500,000 Turnover of operating assets $5,000,000

Turnover = 1.5

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3)

Net operating income Return on investment (ROI) Average operating assets

$600,000 Return on investment (ROI) $5,000,000

Return on investment = 12%