Bausch and Lomb, Inc (a)

3. Increase in expenses for marketing efforts and expanded distribution even if you do not introduce a new product.

Increased marketing budget costs to launch the new product and provide incentives to “Maintenance users

So this a very good news that in the new incentive plan there is a management by objective , it will permit to salespersons team to be more efficient , and they will

Reduced inventory by 1.8 million pair. Based on the COGS of 45%, this could mean a reduction in inventory of close to $10M.

* This plan had more merit in the long run of three to four years and they need this plan to be applied on this current year as increasing in its sales goal.

Lastly, the company suggest to expand their current inventory through increasing production and capacity. With the increase in production rate the company can gain more consumers as a whole through supply and demand. Doing this would give the company an opportunity for more exposure and perhaps better brand recognition.

* Increase in sales and decrease in promotional costs for the introduction of the new product

A. KNC has engaged in a strategy to sell to customers with higher credit risk.

1. There were many adjustments that were made in the original balance sheet to properly record overstatements made by DHB Inc. In the current assets, one major entry that was heavily overstated was inventory. Inventory went from $47,560,000 to $38,231,000. The difference of $47,742,000 is a material due to the magnitude of the difference.

1. What accounting approach has AOL used in the past that it is now changing (related to the $385 million)?

Overall, the profit before tax of the Manufacturing Group decreased 13.24%, and the Retail Group decreased 10.77%, for a total decrease of 11.28%. In simple terms, expenses have increased, profits have decreased, and Harrington Collection hasn’t performed very well over the last several years.

They include: creating a tax shield, generating more free cash flow for future expansions, generating more free cash flow to repurchase stock, a short run increase in EPS due to repurchase of stocks, and overall an increase to the intrinsic value of the company.

Support: The inventory increase in 1997, YOY, was 58%. Additionally, the COGS to revenue ratio reduced from to 72% in 1997. This combination of increase in inventory and reduction in COGS as a percentage of revenue seems to indicate that the fixed costs may have been spread over a larger base through over production, thereby causing the COGS to reduce. This may be a cause for concern and could be a potential red flag.

to have good strategic development. Since these purchases are the main source of their business products, risk will need to be minimal.

a. BAM Price: Should the BAM price be higher or lower than the suggested $175