Alyeska Services Company, a division of a major oil company, provides services to operators in the North Slope oil field of Alaska. The data for the most recent year is as follows: - Sales: $18,600,000 - Net operating income: $6,100,000 - Average operating assets: $36,800,000 Required: 1. Compute the margin for Alyeska Services Company. (Round your answer to two decimal places.) 2. Compute the turnover for Alyeska Services Company. (Round your answer to two decimal places.) 3. Compute the return on investment (ROI) for Alyeska Services Company. (Round your intermediate calculations and the final answer to two decimal places.)

1. Margin is calculated as Net Operating Income divided by Sales. For Alyeska Services Company, the margin is: Margin = Net Operating Income / Sales Margin = $6,100,000 / $18,600,000 Margin ≈ 0.327957 (or 32.80% after rounding to two decimal places)

2. Turnover is calculated as Sales divided by Average Operating Assets. For Alyeska Services Company, the turnover is: Turnover = Sales / Average Operating Assets Turnover = $18,600,000 / $36,800,000 Turnover ≈ 0.505435 (or 0.51 after rounding to two decimal places)

3. Return on Investment (ROI) is calculated as the product of Margin and Turnover. For Alyeska Services Company, the ROI is: ROI = Margin * Turnover Using the previous results: ROI = 0.327957 * 0.505435 ROI ≈ 0.1657 (or 16.57% after rounding to two decimal places)

Extra: Understanding Margin, Turnover, and ROI:

Margin is a financial metric that shows what percentage of sales has turned into profits. It is a good indicator of the profitability and pricing strategy of a company. A higher margin typically means that the company is more profitable and has better control over its costs relative to its sales.

Turnover, in this context, refers to Asset Turnover and measures how efficiently a company uses its assets to generate sales. It is an indicator of the company's operational efficiency. A higher turnover rate implies that the company is using its assets more efficiently to produce more sales.

Return on Investment (ROI) combines both Margin and Turnover to give an overall measure of the effectiveness of management in generating profits with its available assets. ROI is a key performance indicator that helps in assessing the profitability of a business and its efficiency in using its assets. The higher the ROI, the better the company is at using its assets to generate profit.