Homework SourseAlyeska Services Company a division of a major oil company p
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:
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.)
| Sales | $ | 17,400,000 |
| Net operating income | $ | 5,600,000 |
| Average operating assets | $ | 36,600,000 |
Solution
SOLUTION
1. Margin = Net opearting income / Sales
= $5,600,000 / $17,400,000
= 32.18%
2. Turnover = Sales / Average operating assets
= $17,400,000 / 36,600,000
= 0.47
3. ROI = Margin * Turnover
= 32.18% * 0.48
= 15.45%
