Differences in lucents performance between those quarters

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1. Conduct a DuPont decomposition of Lucent's ROE for the 1998, 1999 and 2000 first (December) quarters. What factors contributed to the differences in Lucent's performance between those quarters?

2. Evaluate the seasonally adjusted change (i.e., quarter i in year t to quarter i in year t-1) in Lucent's: Sales, Accounts Receivable, Inventory and Gross Margin for the five quarterly periods: December 1998 through December 1999. Be sure to include an evaluation of the Footnote disclosures regarding Lucent's inventories in your examination. Does the explanation for the earnings shortfall provided by Lucent's managers make sense in light of your analysis

3. Based on your analysis:
a) When might you have determined that Lucent would be unable to maintain its streak of record earnings
b) Do you think the class-action lawsuits have merit
c) Would you expect Lucent's earnings to 'recover' by the second quarter of 2000? What obstacles to Lucent's earnings recovery present themselves?

Reference no: EM13212499

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