Bcos of LIFO Liquidation - older, lower priced Inventory flow thro' COGS.
As a result of that - your net income is boosted due to "lower COGS" when compared to normal LIFO Inventory.
So your net income is inflated.
However, I am not sure if this is discussed anywhere in the CFAI Books. [If it is and I am mistaken, please point me to the source].
I could not find it in the index. However, I know the analyst "removes" the LIFO liquidation in order to normalize NI, but I'm not familiar what he's supposed to add back.
It seems to me that COGS should obviously go up, NI should go down, and taxes increase. Buuuuut, I don't know by how much. If given previous data with normal COGS, I'd look at taking an average or the prior-period COGS and go with that...