Kelli Davis is in the flower business. While business has been steady, she wonders if she should expand her business to include candy as well. Both flowers and candy fit well into her business model. Kelli provides the following projections of annual sales, net income, and average total assets for the flower business alone and for the business if both flowers and candy were sold.

	Flowers Only	Flowers and Candy
Sales	$380,000	$500,000
Net income	40,000	60,000
Average total assets	200,000	250,000

Required: 1. Calculate Kelli's return on assets, profit margin, and asset turnover for flowers only. 2. Calculate Kelli's return on assets, profit margin, and asset turnover for flowers and candy. 3. Based on these ratios, what recommendation would you make if Kelli Davis is considering expanding her business?

	Go forward with the expansion plans.
	Do not go forward with the expansion plans.