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 Required: 1. Compute the margin. Note: Round your answer to 2 decimal places. 2. Compute the turnover. Note: Round your answer to 2 decimal places. 3. Compute the return on investment (ROI). Note: Round your intermediate calculations and final answer to 2 decimal places. 1. Margin 2. Turnover 3. ROI % $ 18,100,000 $ 5,500,000 $ 36,500,000 %
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 Required: 1. Compute the margin. Note: Round your answer to 2 decimal places. 2. Compute the turnover. Note: Round your answer to 2 decimal places. 3. Compute the return on investment (ROI). Note: Round your intermediate calculations and final answer to 2 decimal places. 1. Margin 2. Turnover 3. ROI % $ 18,100,000 $ 5,500,000 $ 36,500,000 %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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
Required:
1. Compute the margin.
Note: Round your answer to 2 decimal places.
2. Compute the turnover.
Note: Round your answer to 2 decimal places.
3. Compute the return on investment (ROI).
Note: Round your intermediate calculations and final answer to 2 decimal places.
1. Margin
2. Turnover
3. ROI
$ 18,100,000
$ 5,500,000
$36,500,000
%
%
Expert Solution
Step 1: Description of ratio analysis
Ratio analysis helps to analyze the financial statements of the company. Management can make decisions on the basis of these ratios. It is also helpful to compare two or more financial statements.
- The margin can be calculated by dividing net income by sales.
- The turnover can be calculated by sales by average operating assets.
- Return on investment can be calculated by net operating income by average operational assets.
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