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Sales $102 22 Federal Stores Sara Togas Interest Payment $6 3 Assets at Start of Year $52 21.2 Net Income $12 6 Assume tax rate
Sales $102 22 Federal Stores Sara Togas Interest Payment $6 3 Assets at Start of Year $52 21.2 Net Income $12 6 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.) Federal Stores Sara Togas 0.95 0.50 Sales-to-assets ratio Operating profit margin Return on assets 2.60 6.03% %6 b. Now assume that the two companies merge. If Federal continues to sell goods worth $102 million, how will the three ratios change? (Do not round Intermediate calculations. Round the sales-to-assets ratlo 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 Sales-to-assets ratio Operating profit margin %% Return on assets %
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