658 Index
Sher win-Williams Company, 62–63, 64
Silgan Holdings Inc., 408
Sirena Apparel Group, 525
SmithKline Beecham PLC, 576
Snapple Beverage Corp., 568, 569–570
Social Security/FICA, 326
Software, 156 –164, 540–541
Sole proprietorship, 226
continuity of life, 234
control, 237
formation, 228–229
liability, 245
out-of-state operation, 231
recognition as legal entity, 232
taxation, 248–249
transferability of interest, 235–236
Southwest Airlines, 53–54
Spin-offs and split-ups, 347–350
Spreadsheet software, 157–160
Standard(s):
collecting, 213
cost accounting systems, 217–219
currently attainable, 203
engineering studies, 213–214
fixed costs, 218–219
government accounting, 217–218
motivation, 213–215
past data, 215
setting (by board of directors), 516
time/motion studies, 214
types of, 202–203
valuation, 623
variable costs, 218
Stead, Jerre, 568
Stock(s), 331–335
appreciation rights (SARs), 331–332
vs. cash deals (M&A), 582–583
employee plans (ESOP), 341–343
shareholders, 189, 239–240, 511
substantially disproportionate distributions,
340–341
synthetic, 439
tax issues, 331–335, 340–341
Storage Technology Corp., 376, 377
Story model, 263–265
Straddle, 425
Strategic partners, 281
Strategy, 516 –518, 552–553
Streaming media, 170
Strike price, 364
Subchapter S, 227, 252–253, 318–322
Substitution, principle of, 596
Sunk costs, 299
Sustainable earnings, 72–96, 617. See also
Earnings
Swaps, 361, 433, 434, 447– 449
equity, 448
interest rate, 449– 451
SWOT, 178
Synthetic cash, 439
Synthetic stock, 439
Systematic risk, 613Taglines, 263
Takeover, 562
Tax issues:
acquisition, 322–324, 578, 580, 583, 585
business decisions, 314–352
business expenses, 325–326
business forms/entities, 228, 248–255
buy-sell agreements, 345–347
case illustration, 315
complete termination of interest, 341
deferred compensation, 326 –328
dividends, 26, 339–340
employee stock ownership plans, 341–343
equity sharing, 330–335
estate planning, 343–347
executive compensation, 325–330
family limited partnerships, 344–345
foreign subsidiaries, 405– 406
gift tax, 317–318
income tax note (example), 78–79
individual federal income tax rates, 249
interest-free loans, 328–330
like-kind exchanges, 337–339
nonrecurring items, 59– 62, 78–79, 90, 93
passive losses, 320–322
pass-through entities, 319–320
reverse triangle merger, 352
sale of corporation, 350–351
shelters, 321
spin-offs and split-ups, 347–350
stock appreciation rights (SARs), 331
stock options, 332–334
subchapter S corporation, 316 –322
substantially disproportionate distributions,
340–341
taxable income and income tax, 296
three-corner exchange, 339
unreasonable compensation, 315–316
vacation home rental, 335–338
Team (business plan section), 281–283
advisory boards, 281–283
bios/roles, 281
board of directors, 281
compensation, 283
external members, 281–283
ownership, 283
strategic partners, 281
Technology. See Information technology
Telef lex Inc., 359
Telsik, Sarah, 519
Tenneco Inc., 364, 373, 405
Three-corner exchange, 339
Tiger International Inc., 410– 413