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 Net operating income Average operating assets $ 18,300,000 $ 5,000,000 $ 35,400,000 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 3. ROI

chap 11 alg 1

Answer 1

Sales 18300000 Average Opearating Assets 35400000 Net operating income 5000000 Margin : Net operating Income / Net sales Net operating income 5000000 Sales 18300000 Profit Margin 27.32% Assets Turnover ratio : Netsales / Average Opearating Assets Sales 18300000 Average Opearating Assets 35400000 Investmnet Turnover ratio : 0.52 ROI : Margin * Asset Turnover ratio Margin 27.32% Investmnet Turnover ratio : 0.516949153 ROI : Margin * Asset Turnover ratio 14.12% Answers Margin Turnover Return on Investment 27.32% 0.52 Times 14.12%(or) 14.21%

Alpha Divisions Bravo Charlie 2445000 327500 472000 171150 458501 61360 489000 131000 236000 14.0% 13% 5.0 2.5 2.0 35.0% 35.0% 26.0% sales Net Operating Income Average Operating Assets Margin Turnover Return on Investment Margin = Net Income / sales Turn over = Sales / Operating Assets ROI = Net income / Operating Assets 7%