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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
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'sperformance 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 fivequarterly periods: December 1998 through December 1999. Be sure to include anevaluation of the Footnote disclosures regarding Lucent's inventories in yourexamination. Does the explanation for the earnings shortfall provided by Lucent'smanagers 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 itsstreak 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?
