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Sara Togas sells all its output to Federal Stores. The following table shows selected financial...

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Sara Togas sells all its output to Federal Stores. The following table shows selected financial data, in millions, for the two firms: Interest Payment $23 20 Sales $119 39 Federal Stores Sara Togas Assets at Start of Year $69 29.5 Net Income $29 23 Assume tax rate is 35%. a. Calculate the sales-to-assets ratio, the operating profit margin, and the return on assets for the two firms. (Do not round intermediate calculations. Round the sales-to-assets ratio answers to 2 decimal places. Enter the operating profit margin and return on assets answers as a percent rounded to 2 decimal places.) Sales-to-assets ratio Operating profit margin Return on assets Federal Stores 1.72 36.93% 42.02% Sara Togas 1.32 92.30% 77.96 % b. Now assume that the two companies merge. If Federal continues to sell goods worth $119 million, how will the three ratios change? (Do not round intermediate calculations. Round the sales-to-assets ratio answer to 2 decimal places. Enter the operating profit margin and return on assets answers as a percent rounded to 2 decimal places.) Merged Firm 1.10 Sales-to-assets ratio Operating profit margin Return on assets % %

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