Harley-Davidson, Inc., is a leading motorcycle manufacturer in the United States. The company manufactures and sells a number of different types of motorcycles, a complete line of motorcycle parts, and brand-related accessories, clothing, and collectibles. In recent years, Harley-Davidson has attempted to expand its dealer network and product lines internationally.

The following information is available for three recent years (in millions except per-share amounts):

1. Calculate the following ratios for each year:
a. Rate earned on total assets
b. Rate earned on stockholders’ equity
c. Earnings per share
d. Dividend yield
e. Price-earnings ratio
2. What is the ratio of average liabilities to average stockholders’ equity for Years 1, 2, and 3?
3. Explain the direction of the dividend yield and price-earnings ratio in light of Harley-Davidson’s profitability trend.
4. Based on these data, evaluate Harley-Davidson’s strategy to expand to internationalmarkets.

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Year 1 ear 3 $599 $0.00 $45 ear Net income (loss) Preferred dividends Interest expense Shares outstanding for computing $147 $0.00 $90 $(55) $0.00 $22 earnings per share Cash dividend per share Average total assets Average stockholders' equity Average stock price per share 233 0475 $9,552 $2,314 $36.43 233 0.40 $9,293 $2,157 $29.94 233 0.40 $8,493 $2,112 $21.09