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 $17,600,000 $ 5,400,000 $36,300,000 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

Answer 1

1
Net Operating income	5400000
Divide by Sales	17600000
Margin	30.68%
2
Sales	17600000
Divide by Average Operating Assets	36300000
Turnover	0.48
3
ROI	14.73%	=30.68%*0.48
Question 2
	Company
	A	B	C
Sales	470000	700000	520000
Net Operating income	31600	39000	20840
Average Operating Assets	158000	260000	144000
Return on Investment(ROI)	20%	15%	14%
Minimum required rate of return:
Percentage	13%	20%	11%
Dollar amount	20540	51000	15840
Residual Income	11060	-12000	5000