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 assetsb. Rate earned on stockholders?? equityc. Earnings per shared. Dividend yielde. Price-earnings ratio2. What is the ratio of average liabilities to average stockholders?? equity for Year 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 3 Year 2 Year 1 Net income (loss) Preferred dividends Interest expense Shares outstanding for computing earnings per share Cash dividend per share Average total assets Average stockholders' equity Average stock price per share $ 960 $ 0.00 S 890 S 0.00 S22.72 $ 761 $ 0.00 $17.64 $36.15 280 $ 0.63 $5,369 $3,151 295 S 0.41 $5,203 53,088 302 $ 0.20 $4,392 $2,595 $46.87 $56.12 $54.14