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	$113	$17	$23	$63
Sara Togas	33	14	17	26.5

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
Sales-to-assets ratio
Operating profit margin		%		%
Return on assets		%		%

b. Now assume that the two companies merge. If Federal continues to sell goods worth $113 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
Sales-to-assets ratio
Operating profit margin		%
Return on assets		%