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Formation of Sole Proprietorships Formation of Partnerships Formation of Corporations Formation of Limited Partnerships Formation of Limited Liability Companies Out-of-State Operation of Sole Proprietorships and Partnerships Out-of-State Operation of Corporations, Limited Partnerships, and Limited ... Recognition of Sole Proprietorships as Legal Entities Recognition of Partnerships as Legal Entities Recognition of Corporations and Limited Liability Companies as Legal Entities Recognition of Limited Partnerships as Legal Entities Continuity of Life Transferability of Interest Control Liability Taxation Choice of Entity Conclusion Problems For Further Reading Chapter 9 - Taxes and Business Decisions The Business Unreasonable Compensation Making the Subchapter S Election Acquisition Executive Compensation Sharing the Equity Vacation Home Like-Kind Exchanges Dividends Estate Planning Spin-Offs and Split-Ups Sale of the Corporation Conclusion Problems For Further Reading Chapter 10 - The Integrity of Financial Reporting Introduction Restatements of Previously Published Financial Statements Asleep at the Switch The Remedies It‟s Not Just the Private Sector Summary and Conclusions Downloadable Resources for this chapter available at www.wiley.com/go/portablembainfinance Notes
For Further Reading Part IV - Management Accounting Chapter 11 - Forecasts and Budgeting The Concept of Budgeting Functions of Budgeting Reasons for Budgeting Effective Budgeting Developing a Budget Forecasting Fixed Budgets versus Flexible Budgets The Profit Plan The Budget Review Process Recent Trends Internet Link Note For Further Reading Chapter 12 - Cost Structure Analysis, Profit Planning, and Value Creation Estimating Cost Structure from Publicly Available Information Pitfalls Profit Planning from an Internal Perspective Pricing in CVP Analysis Predatory Pricing Dumping Notes Chapter 13 - Activity-Based Costing Basics of Activity-Based Systems Reflections What an ABC Systems Is and Is Not Lessons from Japan Summary Notes Part V - Planning and Strategy Chapter 14 - Business Planning How This Chapter Fits in a Typical MBA Curriculum Who Uses This Material in the Real World The Story of Your Business Types of Plans From Glimmer to Action: The Process The Story Model
Page 1 and 2: Table of Contents Title Page Copyri
Page 3: Chapter 6 - Planning Capital Expend
Page 7 and 8: Successful Postmerger Implementatio
Page 10 and 11: This book is printed on acid-free p
Page 12 and 13: Syllabus How Chapter Topics in This
Page 14 and 15: Some of these experts are full-time
Page 16 and 17: About the Contributors Richard T. B
Page 18 and 19: Advances in Quantitative Analysis o
Page 20 and 21: enterprise development. Dr. Zachara
Page 22 and 23: The left side shows Nutrimin‟s in
Page 24 and 25: Gail, let‟s go over this balance
Page 26 and 27: Gail, do you have any questions abo
Page 28 and 29: 11. Not all expenses are cash outfl
Page 30 and 31: Financial Statements: Who Uses Them
Page 32 and 33: profitability to keep investing for
Page 34 and 35: Financial Accounting Standards It i
Page 36 and 37: Downloadable Resources for this cha
Page 38 and 39: Next, we explain each of these thre
Page 40 and 41: liquidity. Or, more simply, achievi
Page 42 and 43: If these ratios are seriously defic
Page 44 and 45: The debt-to-equity ratio is evaluat
Page 46 and 47: year 1 to year 3. The net effect wa
Page 48 and 49: to rate of return on the equity. Th
Page 50 and 51: Other types of comparisons of finan
Page 52 and 53: income/sales), asset turnover (sale
Page 54 and 55:
successful businesspeople should ha
Page 58 and 59:
More than a decade ago, a special c
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companies is used for illustration.
Page 62 and 63:
The identification of nonrecurring
Page 64 and 65:
The Dow Chemical single-step income
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is a pretax measure, but income fro
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Sources: Companies‟ annual report
Page 70 and 71:
Exhibit 3.11 Examples of discontinu
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amortization purposes, the Company
Page 74 and 75:
Examples of nonrecurring items disc
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During Fiscal 2006, inventory quant
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The nonrecurring items of Boston Sc
Page 80 and 81:
The disclosure presented earlier in
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gains or losses that appear as part
Page 84 and 85:
ecurring as for Kimberly-Clark, the
Page 86:
Summarizing Nonrecurring Items and
Page 89 and 90:
This example of using the SEB works
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Exhibit 3.27 Other income (expense)
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Source: Pfizer, Inc., annual report
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Exhibit 3.30 Acquisitions note: Pfi
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Source: Pfizer, Inc., annual report
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Exhibit 3.33 Cost-reduction initiat
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Exhibit 3.36 Share-based payment no
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The Pfizer Worksheet Analysis: Down
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Some Further Points on the Pfizer W
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• It is common to treat items as
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FedEx Corporation (2007) First Sola
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1 The American Institute of Certifi
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28 These alternative translation me
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If you need some instruction in Exc
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To solve using Excel, open your Exc
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As you can see from the previous ex
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C6 = 5 • Now enter the “=” si
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Ordinary Annuity An ordinary annuit
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To confirm that the number of payme
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The FV of this first payment into t
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Exhibit 4.15 Finding the future val
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Exhibit 4.18 Finding the present va
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From Exhibit 4.20, we see that as t
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Exhibit 4.22 Amortization schedule
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Exhibit 4.25 Regular cash flows wit
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Internet Links For Further Reading
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Investors who are risk averse will
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considering the risk of a single as
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Portfolio Risk Stand-alone risk is
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In spite of unique or diversifiable
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If a particular stock is highly sus
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The formula tells us that, to begin
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for the entire market of stocks sin
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The dividend per share for preferre
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If you are able to determine the cu
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Debt finance is the lower-cost meth
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We don‟t observe many firms whose
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Capital Structure in Practice Finan
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are able to observe regularities in
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dividends and capital gains. We wil
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where EBIT is earnings before inter
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Since long-term debt holders have a
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accept more investment projects. Re
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A beer company is considering build
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accounts receivable, and tabulates
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profit by the tax rate determines t
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Accounting profit often mixes varia
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The concept that future cash flows
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Like project A, project C also cost
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The after-tax interest rate is the
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equal mix of debt and equity, its d
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The payback period rule stipulates
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The IRR rule is appealing in that i
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complete with its real options is g
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What does it matter that one invest
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Exhibit 7.3 Time line in dollars an
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There are a number of countries in
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eturn of 10% on its investments in
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Exhibit 7.12 Summary of exchange ra
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and so will the value of the liabil
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Source: CIA, World Factbook, availa
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Exhibit 7.18 Net present value of c
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equired interest payments to be pai
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So if the assistant treasurer was r
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This theory is far from perfect, as
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The Consulting Firm Jennifer, Jean,
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part by a statute, the Uniform Limi
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formation in Delaware (or any state
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purpose of requiring qualification.
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Phil‟s death may terminate the bu
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the transfer. This means that if Br
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These rules extend to tort liabilit
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In the absence of a meeting, stockh
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A more detailed discussion on the b
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Partnerships If possible, the resul
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associated with this arrangement ar
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Partnerships are also not separate
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For most start-up businesses, howev
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form, even at the risk of some unli
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likely that our consultants will be
Page 260 and 261:
Thus, the corporation and LLC, with
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It is not possible to fully describ
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usiness corporation for all purpose
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a cash-basis taxpayer to be taxed a
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The Tax Reform Act of 1986 substant
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limit is the product of the value o
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he would have spent anyway. In fact
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protect Brad from the scenario of h
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paying for the privilege. If the st
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The second tax scenario attaches to
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include that nullity in his taxable
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then the capital gain to be taxed h
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Most relevant to Morris is Section
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To begin with, the ESOP will have t
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general partner of a limited partne
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small businesses) is also subject t
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oth Lisa and Brad would be free to
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Assume that a limited liability com
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corporations, and had been audited
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There is plenty of blame from the c
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• An important study about top ma
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• The federal government made at
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$79.7 million for other services, a
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Budgets offer a variety of benefits
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determine the impact of specific pr
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Exhibit 11.2 Budget variance report
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udget, we just add more to it next
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income statement. The financial bud
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For a manufacturing company, cost o
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C&G‟s Gift Shop has a policy to m
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Meeting cash obligations as they co
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was unusually low, say, due to the
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A fixed budget, sometimes called a
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A large part of the budget selling
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• Centralized resource allocation
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Merewitz, Leonard, and Stephen H. S
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This chapter starts with a discussi
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Interestingly the numbers for quart
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Exhibit 12.4 Scenarion analysis.
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Pitfalls Although this analytic tec
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Exhibit 12.6 Variable cost element
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Variable Cost as a Function of Outp
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If scenario 2 yields a lower profit
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Microsoft certainly does not price
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If it is determined that dumping ha
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Leaving government agencies and not
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transaction processing. Each proces
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Exhibit 13.3 E-commerce transaction
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To summarize the analysis, the busi
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Capacity costs are probably the mos
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which it was, but for the inventory
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They called this strategic cost man
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A closer study, however, revealed s
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the benefits of business planning.
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The last type of plan is called a d
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The Business Plan We will progress
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Hook the Reader That means having t
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Industry The goal of this section i
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upscale suburban client who wants p
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Company and Product Description Com
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Exhibit 14.8 shows the competitive
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Exhibit 14.9a Advertising schedule.
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Scope of Operations What is the pro
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Development Time Line A development
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By law, most organization types req
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As mentioned in the development pla
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that can be depreciated, you should
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1 Special thanks to Matt Feczko, Mi
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For better or worse, the business e
Page 407 and 408:
Leeson bet and lost. Japanese stock
Page 409 and 410:
Between February and April 1994, Da
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LTCM could be picky when it came to
Page 413 and 414:
An investor who wished to invest in
Page 415 and 416:
Similarly, the swaps market has rev
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speculator would suffer losses equa
Page 419 and 420:
American manufacturer will suffer l
Page 421 and 422:
The ease with which futures facilit
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Exhibit 15.1 Call option payoff dia
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Exhibit 15.2 Payoff diagram for a w
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Notice that the put option payoff r
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Bank, owns a large block of NASDAQ
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can be tailored so that the money r
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Finally, the last step is to choose
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3 Fischer Black, who co-invented th
Page 439 and 440:
not include assets that the firm ha
Page 441 and 442:
Thus, a business valuation will usu
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Negative • Acme is highly depende
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Exhibit 16.3 Acme Manufacturing, In
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Profitability ratios reflect the re
Page 449 and 450:
When we talk about the value of a b
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This example illustrates that with
Page 453 and 454:
Income Approach: Discounted Cash Fl
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Exhibit 16.5 Acme Manufacturing, In
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Victoria explains that the second p
Page 459 and 460:
Victoria analyzes Acme‟s audited
Page 461 and 462:
In summary, the discounted cash flo
Page 463 and 464:
Adjustment for Illiquidity As previ
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51% position sells for a higher pri
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examples. The proper application of
Page 471 and 472:
The subject of this chapter is grow
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Finally, an acquisition can be effe
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M&A activity has been the focus of
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companies continue to make the same
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equals was taking on a distinctive
Page 481 and 482:
Anatomy of a Successful Acquirer: T
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employees kept their original jobs
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where ΔCF t is the incremental cas
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where it‟s ultimately buried. Suc
Page 489 and 490:
The following example summarizes th
Page 491 and 492:
make sure that you are at least awa
Page 493 and 494:
acquisition, there is no immediate
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its vascular business, which was so
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While all employees should be part
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makes strategic and financial sense
Page 501 and 502:
Bhagat, Sanjai, Ming Dong, David Hi
Page 505 and 506:
The 2008 financial crisis underscor
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Source: Plunkett’s Outsourcing &
Page 509 and 510:
To summarize: Trends • Large numb
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Companies are becoming increasingly
Page 513 and 514:
What steps should a company follow
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• Results of meetings with vendor
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• Breach of contract and remedies
Page 519 and 520:
Assuming the project or service rev
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The answer is: profits. The company
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19 Information Technology and You D
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People‟s lives have been turned u
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its self-contained rechargeable bat
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Random-Access Memory (RAM) Random-a
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On laptop computers and PDAs, the s
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Operating System An operating syste
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the spreadsheet software together w
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Exhibit 19.5 Pro forma sales and in
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Database Software A database is a c
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Internet e-mail addresses often con
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Personal Finance Software There are
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There are several different approac
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One of the major attractions of the
Page 551 and 552:
While not a new version of the Web
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industrial revolution, and has occu
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Dummies Inc. has a series of books
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organization. This chapter is desig
Page 561 and 562:
As technology has evolved, the term
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While the software mentioned earlie
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Most of the focus of the investor c
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Data Access and OLAP Before the lat
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Exhibit 20.5 illustrates a differen
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Productivity Tools Workers expect t
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Client-server technology is based o
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Today, most programmers write in C+
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Exhibit 20.6 is a model of a typica
Page 579 and 580:
No treatment of relational database
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Online analytical processing (OLAP)
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server) and the rest on the users
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the other operational departments w
Page 587:
The world of business has changed d
Page 591:
Chaffey, Dave, E-Commerce and E-Com
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According to the results of the sur
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understand the financial situation
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MBA graduates who are hoping to ent
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Summary Financial services opportun
Page 603 and 604:
Let‟s begin with the “I left it
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MBA student: “Well, I go to [Grea
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Aiming for Your Goals For career ch
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Networking is generally regarded as
Page 611 and 612:
Let‟s begin with some key assumpt
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like, or moving ahead in the compan
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Accrual accounting: An accounting m
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Cash flow: Cash that is spent or re
Page 622 and 623:
Distribution channel: A chain of in
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Goodwill: As it relates to valuatio
Page 626 and 627:
Management’s discussion and analy
Page 628 and 629:
Ordinary annuity: An annuity that p
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Securities and Exchange Commission
Page 632 and 633:
Vertical merger: A merger in which
Page 634 and 635:
about activity-based costing progre
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Application systems ARPAnet Arthur
Page 638 and 639:
Bell Labs Benefit measurement Beta
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goal orientation legal and contract
Page 642 and 643:
segment information note share-base
Page 644 and 645:
process of purpose of real world us
Page 646 and 647:
uy/build decision capital budget in
Page 648 and 649:
written resume Careers in corporate
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Cell Center for Research in Securit
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Compensation and ownership Competit
Page 654 and 655:
Corporate culture Corporate debt in
Page 656 and 657:
profit planning from an internal pe
Page 658 and 659:
Data Data access and OLAP Database
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Askin Capital Management Barings Ba
Page 662 and 663:
market approach publicly traded gui
Page 664 and 665:
Electronic data interchange (EDI) E
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Extensible markup language (XML) Ex
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short term liquidity users and uses
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Fourth generation programming (4GL)
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Going private Going private transac
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Hypertext links Hypertext markup la
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Information technology and the firm
Page 678 and 679:
International Accounting Standards
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Last-in-first out (LIFO) vs. curren
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Long call option payoff Longer-term
Page 684 and 685:
Market risks Market size and struct
Page 686 and 687:
Motivation to outsource Multiple IR
Page 688 and 689:
Nonrecurring items defined disclosu
Page 690 and 691:
Operational complexity Operational
Page 692 and 693:
Outsourcing metrics Overhead Over-t
Page 694 and 695:
Personal end game Personal expense
Page 696 and 697:
Price competition Price decreases P
Page 698 and 699:
Projected cash flow statements Proj
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Relevant range Relevant range assum
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Risk sharing Risk transfer Risk vs.
Page 704 and 705:
Short call option payoff Short part
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Spot price Spreadsheet software Spr
Page 708 and 709:
Summarizing nonrecurring items and
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acquisition the business dividends
Page 712 and 713:
Timmon‟s Model of Opportunity Rec
Page 714 and 715:
U.S. immigration quotas U.S. Intern
Page 716 and 717:
discounting with discount rate form
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