25. [Profitability analysis] The financial statements of Harley Davidson, Inc. for the period 1985-1990 are presented in Exhibit 4P-5. Harley Davidson was considered one of the success stories of the 1980s, having introduced world-class management tech- niques to turn around the company. At the same time, however, an examination of the company's return on equity indicates that after initial growth, the ratio stabilized and then declined.

a. Using the five-component duPont model, disaggregate Harley's return on equity (ROE) for the period 1985-1990.

b. Discuss the contribution of cach component to the change in ROE over the period.