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 $17,300,000 Net operating income $5,100,000 Average operating assets $35,300,000"Compute the margin for Alyeska Services Company. (Omit the "%" sign in your response.)Compute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.)Compute the return on investment (ROI) for Alyeska Services Company. (Omit the "%" sign in your response.)

Answer 1

Answer:

The margin for Alyeska Services Company: 29.48

The turnover for Alyeska Services Company: 49.01

The return on investment for Alyeska Services Company: 14.45

Explanation:

Please find the below for detailed explanation and calculations:

We have the formula for calculating the ratios as require in the question: Margin = Net operating income/ Sales ; Turnover = Sales/Average operating assets; Return on investment = Net operating income/ Average operating assets.

Thus, we have:

The margin for Alyeska Services Company is calculated as Net operating income/ Sales or 5,100,000/17,300,000 = 29.48%;

The turnover for Alyeska Services Company is calculated as Sales/Average operating assets or 17,300,000/35,300,000 = 49.01%;

The return on investment for Alyeska Services Company is calculated as Net operating income/ Average operating assets: 5,100,000/35,300,000 = 14.45%.

Hope this is helpful to you.