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Fitness Fanatics is a regional chain of health clubs. The managers of the clubs, who have authority to make investments as needed, are evaluated based
Fitness Fanatics is a regional chain of health clubs. The managers of the clubs, who have authority to make investments as needed, are evaluated based largely on return on investment (ROI). The company's Springfield Club reported the following results for the past year: Sales Net operating income Average operating assets $ 810,000 $ 21,060 $ 100,000 The following questions are to be considered independently. Required: 1. Compute the Springfield club's return on investment (ROI). (Do not round intermediate calculations. Round your answer to 2 decimal places.) Return on investment (ROI) 2. Assume that the manager of the club is able to increase sales by $81,000 and that, as a result, net operating income increases by $6,561. Further assume that this is possible without any increase in average operating assets. What would be the club's return on investment (ROI)? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Return on investment (ROI) 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 $ 18,000,000 $ 6,000,000 $ 35,900,000 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 0.50
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