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Lucent Technologies Harvard Case

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Lucent Technologies Harvard Case
Maria Lucia Rodriguez
PANTHER ID 3579558
Lucent Technologies Case

1- ROE decomposition 1998,1999 AND 2000. What factors contributed to the differences in Lucent’s performance between those quarters?
ROE
Period
NET INCOME
X SALES
X TOTAL ASSETS
SALES
TOTAL ASSETS COMMON EQUITY
EQUITY MULTIPLIER
ROE
Dec-99
1175
0.12
9905
0.26
38684
2.41
9905
38684
16079
Sep-99
972
0.09
10575
0.27
38735
2.84
10575
38735
13622
Jun-99
829
0.09
9315
0.25
37156
3.00
9315
37156
12403
Mar-99
457
0.06
8220
0.25
32840
3.63
8220
32840
9051
Dec-99
1523
0.15
9842
0.31
31641
3.75
9842
31641
8437
Sep-98
647
0.08
8574
0.32
26720
4.83
8574
26720
5534
Jun-98
518
0.07
7642
0.30
25279
5.14
7642
25279
4922
Mar-98
186
0.03
6184
0.25
24664
4.90
6184
24664
5036
Dec-97
1124
0.13
8724
0.35
24752
5.30
8724
24752
4671
Sep-97
369
0.05
6933
0.29
23811
7.03
6933
23811
3387
5.05%
18.05%
11.69%
PROFIT MARGIN
TOTAL ASSET TURN OVER
7.31%
7.14%
6.68%
10.52%
3.69%
24.06%
10.89%
ROE
Period
NET INCOME
X SALES
X TOTAL ASSETS
SALES
TOTAL ASSETS COMMON EQUITY
EQUITY MULTIPLIER
ROE
Dec-99
1175
0.12
9905
0.26
38684
2.41
9905
38684
16079
Sep-99
972
0.09
10575
0.27
38735
2.84
10575
38735
13622
Jun-99
829
0.09
9315
0.25
37156
3.00
9315
37156
12403
Mar-99
457
0.06
8220
0.25
32840
3.63
8220
32840
9051
Dec-99
1523
0.15
9842
0.31
31641
3.75
9842
31641
8437
Sep-98
647
0.08
8574
0.32
26720
4.83
8574
26720
5534
Jun-98
518
0.07
7642
0.30
25279
5.14
7642
25279
4922
Mar-98
186
0.03
6184
0.25
24664
4.90
6184
24664
5036
Dec-97
1124
0.13
8724
0.35
24752
5.30
8724
24752
4671
Sep-97
369
0.05
6933
0.29
23811
7.03
6933
23811
3387
5.05%
18.05%
11.69%
PROFIT MARGIN
TOTAL ASSET TURN OVER
7.31%
7.14%
6.68%
10.52%
3.69%
24.06%
10.89%

ROE shoe a decrease over different periods due to
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