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 $ 7,500,000 Net operating income $ 600,000 Average operating assets $ 5,000,000 Required: 1. Compute the margin for Alyeska Services Company. 2. Compute the turnover for Alyeska Services Company. (Round your answer to 1 decimal place.) 3. Compute the return on investment (ROI) for Alyeska Services Company. (Do not round intermediate calculations.)

Answer 1

1. The margin for Alyeska Services Company is 0.08

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2. The turnover for Alyeska Services Company is 1.50

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3. The return on investment for Alyeska Services Company is 12%

Step-by-step explanation:

1. In order to calculate the margin for Alyeska Services Company we would have to calculate the following:

Margin=Net operating Income / Sales

Margin=$600,000 /$7,500,000

Margin=0.08

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2. In order to calculate the turnover for Alyeska Services Company we would have to calculate the following:

Turnover= Sales/Average operating assets

Turnover=$7,500,000 /$5,000,000

Turnover=1.50

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Turnover of the company is 1.50

3. In order to calculate the return on investment for Alyeska Services Company we would have to calculate the following:

Return on Investments= Net operating Income /Average operating Assets

​Return on Investments=$600,000 /$5,000,000

Return on Investments= 12%

The Return on investments is 12%