Hemingway Corporation manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives in the United States. The company is considering expanding its operations worldwide to boost its income and cash flows. The expansion project will require the company to raise $100 million capital to finance the project. Mike Schenk, MBA has been hired to assist the company with the preparation of financial statement analysis and to suggest actions needed to raise the needed funds. Schenk is directed to send copies of the financial statement analysis to management of the company, potential lenders, and strategic investors. The balance sheet and income statement for the company are shown below. Balance Sheet (Millions of Dollars) 2019 2020 2021Est. Assets Cash and equivalents 62 52 52 Short-term investments 102 12 52 Accounts receivable 402 522 532 Inventories 640 840 680 Total current assets 1,206 1,426 1,316 Net fixed assets 2,920 3,520 3,720 Total assets 4,126 4,946 5,036 Liabilities and equity Accounts payable 330 430 365 Notes payable 182 252 120 Accruals 200 240 272 Total current liabilities 712 922 757 Long-term bonds 800 1,100 1,100 Total liabilities 1,512 2,022 1,857 Common stock (100,000 shares) 1,000 1,000 1,000 Retained earnings 1,650 1,924 2,216 Total common equity 2,650 2,924 3,216 Total liabilities and equity 4,126 4,946 5,036 Income Statement (millions of Dollars) 2019 2020 2021Est. Net sales 6,500 7,000 7,600 Cost of goods sold 4,400 4,800 5,320 Depreciation 292 322 372 Other operating expenses 360 400 410 Earnings before interest and taxes (EBIT) 1,448 1,478 1,498 Less interest 68 108 100 Pre-Tax earnings 1,380 1,370 1,398 Taxes (25%) 345 343 350 Net Income 1,035 1,028 1,049 Industry average for selected ratios Profit margin 16.0% Inventory turnover 6.0 Operating profit margin 22.0% Fixed assets turnover 2.3 Basic Earning power 35.5% Total assets turnover 1.6 ROA 25.6% Current 2 ROE 36.5% Quick 0.85 P/E ratio 9.4 Debt ratio 30.0%

Explain benchmarking. Indicate whether the asset management ratios of the company have improved or worsened relative to the industry.