Exercise 9-1 Compute the Return on Investment (ROI) [LO9-1]

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	$	18,800,000
Net operating income	$	5,200,000
Average operating assets	$	36,300,000

Required:

1.

Compute the margin for Alyeska Services Company. (Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)

Margin

%

2.

Compute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.)

Turnover

3.

Compute the return on investment (ROI) for Alyeska Services Company. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).

ROI

%

Exercise 9-2 Residual Income [LO9-2]

Juniper Design Ltd. of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $450,000 on sales of $1,900,000. The companys average operating assets for the year were $2,100,000 and its minimum required rate of return was 11%.

Required:

Compute the companys residual income for the year.

Average operating assets
Net operating income
Minimum required return
Residual income

Exercise 9-5 Return on Investment (ROI) [LO9-1]

Provide the missing data in the following table for a distributor of martial arts products: (Enter your Margin and ROI answers to the nearest percentage (i.e., 0.123 should be entered as 12).)

	Division
	Alpha		Bravo		Charlie
Sales	?		$280,000		?
Net operating income	?		$39,200		$38,870
Average operating assets	$438,000		?		?
Margin	7	%	?	%	13	%
Turnover	4		?		?
Return on investment (ROI)	?	%	28	%	13	%