Down Plays.

"If you build it, they will come," was the mantra of the movie "Field of Dreams." But if you forecast it, it's not necessarily preordained -- especially if it is stock market performance.

"Even in the best of times, you have limited ability to keep your stock from falling, says David Mangefrida, national director of asset management tax services at Ernst & Young. "Even a one-day drop is utterly beyond anyone's control. Still, it's amazing how many businesspeople think you can just forecast a trend outward and have it happen. As a result, they have no contingency plans for a potential market downturn. They let their debt/equity ratios get our of whack. They don't pay attention to cash flow because things have been going along great guns and they've been buying everything with stock." The moral of the story? "Don't plan as if the past is the mandated future," he advises.

And what other counsel does the Washington, D.C.-based Mangefrida have for CFOs who want to shore up sagging stock prices should the market bubble burst?

* Make strategic use of your stock if your company is better valued than its competitors. "If you're in the neighborhood for acquisitions and you think there's a good chance the entity you want to buy is too expensive at current prices, rake advantage of the fact that you may hit a market downdraft," he says. This is especially true, he adds, "if you've got a buy-back going on, so you've been slowly increasing the value of your stock." And if your stock is over-performing relative to your competitors' -- which doesn't necessarily mean that it's going up, but that it's going down less than theirs -- "All of a sudden, that target is a whole lot cheaper-looking in relative terms," Mangefrida says. "It's akin to the old buy low/sell high strategy. Don't buy high. Use that downdraft to make a good strategic fit." Then, not only will your company's acquisitions be cheaper, he notes, "but the market will reward you, because your stock price, relatively speaking, will go up even more." And if your firm is better valued in the marketplace than its competitors, seek acquisitions, he suggests. "The downturn is exactly the time to do it. Unfortunately, though, what often happens in corporations when the bad times hit is that everybody hunkers down and doesn't move because they're scared of their shadows. But that's when the smart people do their acquisitions. Don't do what the Japanese did and buy at the height of the market. But when there's an opportunity, seize it."

* Psych out the investment community; do a reverse stock split. "Say your company's stock price gets down to the single-digit range," Mangefrida posits. "For no apparent reason, stocks seem psychologically less volatile and tend to be viewed better by the market relative to their peers if the price is in double-digits or better. So if you've got two companies with exactly the same underlying economics, but one has twice as many shares and is at nine while the other is at 18, the one at 18 is going to perform somewhat better. It's not a common-sense thing, but it's true."

* Consider stock buy-backs in a sustained down market. "This is, after all, supply and demand," Mangefrida says. "If there's less demand, the price will go up."

* It's more important in a declining market to optimize tax-planning opportunities. "Even if you don't get permanent tax benefits on the financial statement from some of the ideas that emerge, increased cash flow is something investors pay attention to in a down market," he thinks. "They also look at coverage on your debt. Anything you can do to increase cash flow will support your stock price in the market."

* Evaluate your company's policy on stock options. "In the current economic climate, people are ignoring the fact that there's a massive potential dilution sitting out there for a lot of companies," he warns. "Options are an enormously expensive way to raise capital, because essentially they're the reverse of raising capital. You're paying people with a future revenue stream of the company rather than with a salary -- and far, far more than you'd have to pay if you actually gave them a salary." And, he notes, "When that market downdraft hits, if you've got an enormous amount of low-cost options sitting out there, people may exercise before things get worse. You're going to get a big exercise, then everybody's going to turn around and dump the shares. It's going to drive your stock price lower and lower and lower. Options on the down side can be a real danger."

However, talk of options doesn't always bring out the Cassandra in this seasoned tax attorney. "If you're already in a down market and thinking about new stock options, that's a different matter," he explains. "If you're judicious about that, it's a good way to reward people while keeping your ratios in check. If people can see the company is well managed and the economy is going to turn around, it can be a value-driver."

* And, as always, play fair. "If you keep your nose clean, you'll look a lot better to the analysts in a down marker," he says. "Analysts are going to pay attention to you because they can trust your evaluations. The other guy is going to cause controversy. Physically changing the way you do your business so it's legitimate to report the changes will win you kudos, too. People will think you're being up-front with them."