19. Sara Togas sells all its output to Federal Stores. The following table shows selected financial data,
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19. Sara Togas sells all its output to Federal Stores. The following table shows selected financial data, in millions, for the two firms:
Sales Interest Payment Net Income Assets at Start of Year Federal Stores $100 $4 $10 $50 Sara Togas 20 1 4 20 Calculate the sales-to-assets ratio, the operating profit margin, and the return on assets for the two firms. Now assume that the two companies merge. If Federal continues to sell goods worth $100 million, how will the three ratios change?
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