Valuation has been the foremost resource for measuring company value for nearly three decades. Now in its seventh edition, this acclaimed volume continues to help financial professionals around the world gain a deep understanding of valuation and help their companies create, manage, and maximize economic value for their shareholders.
This latest edition has been carefully revised and updated throughout, and includes new insights on topics such as digital, ESG (environmental, social and governance), and long-term investing, as well as fresh case studies.
Clear, accessible chapters cover the fundamental principles of value creation, analyzing and forecasting performance, capital structure and dividends, valuing high-growth companies, and much more. The Financial Times calls the book one of the practitioners best guides to valuation.
This book:
Provides complete, detailed guidance on every crucial aspect of corporate valuation
Explains the strategies, techniques, and nuances of valuation every manager needs to know
Covers both core and advanced valuation techniques and management strategies
Features/Includes a companion website that covers key issues in valuation, including videos, discussions of trending topics, and real-world valuation examples from the capital markets
For over 90 years, McKinsey & Company has helped corporations and organizations make substantial and lasting improvements in their performance. Through seven editions and 30 years, Valuation: Measuring and Managing the Value of Companies, has served as the definitive reference for finance professionals, including investment bankers, financial analysts, CFOs and corporate managers, venture capitalists, and students and instructors in all areas of finance.
TABLE OF CONTENTS -- About the Authors -- Preface -- Acknowledgments --Part One Foundations of Value -1 Why Value Value? - 2 Finance in a Nutshell - 3 Fundamental Principles of Value Creation - 4 Risk and the Cost of Capital - 5 The Alchemy of Stock Market Performance - 6 Valuation of ESG and Digital Initiatives - 7 The Stock Market is Smarter Than You Think -8 Return on Invested Capital - 9 Growth -- Part Two Core Valuation Techniques - 10 Frameworks for Valuation - 11 Reorganizing the Financial Statements - 12 Analyzing Performance - 13 Forecasting Performance -14 Estimating Continuing Value -15 Estimating the Cost of Capital -16 Moving from Enterprise Value to Value per Share - 17 Analyzing the Results - 18 Using Multiples - 19 Valuation by Parts -- Part Three Advanced Valuation Techniques - 20 Taxes - 21 Nonoperating Items, Provisions, and Reserves - 22 Leases - 23 Retirement Obligations - 24 Measuring Performance in Capital-Light Businesses - 25 Alternative Ways to Measure Return on Capital -26 Inflation - 27 Cross-Border Valuation -- Part Four Managing for Value - 28 Corporate Portfolio Strategy - 29 Strategic Management: Analytics - 30 Strategic Management: Mindsets and Behaviors - 31 Mergers and Acquisitions - 32 Divestitures - 33 Capital Structure, Dividends, and Share Repurchases - 34 Investor Communications --Part Five Special Situations - 35 Emerging Markets - 36 High-Growth Companies - 37 Cyclical Companies - 38 Banks - 39 Flexibility - Appendix A Discounted Economic Profit Equals Discounted Free Cash Flow - Appendix B Derivation of Free Cash Flow, Weighted Average Cost of Capital, and Adjusted Present Value - Appendix C Levering and Unlevering the Cost of Equity - Appendix D Leverage and the Price-to-Earnings Multiple -- Appendix E Other Capital Structure Issues -Appendix F Technical Issues in Estimating the Market Risk Premium - Appendix G Global, International, and Local CAPM - Appendix H A Valuation of Costco Wholesale - Appendix I Two-Stage Formula for Continuing Value -- Index.
