Valuation

Valuation : Measuring and Managing the Value of Companies

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The number one guide to corporate valuation is back and better than ever Thoroughly revised and expanded to reflect business conditions in today's volatile global economy, Valuation, Fifth Edition continues the tradition of its bestselling predecessors by providing up-to-date insights and practical advice on how to create, manage, and measure the value of an organization. Along with all new case studies that illustrate how valuation techniques and principles are applied in real-world situations, this comprehensive guide has been updated to reflect new developments in corporate finance, changes in accounting rules, and an enhanced global perspective. Valuation, Fifth Edition is filled with expert guidance that managers at all levels, investors, and students can use to enhance their understanding of this important discipline.
* Contains strategies for multi-business valuation and valuation for corporate restructuring, mergers, and acquisitions * Addresses how you can interpret the results of a valuation in light of a company's competitive situation * Also available: a book plus CD-ROM package (978-0-470-42469-8) as well as a stand-alone CD-ROM (978-0-470-42457-7) containing an interactive valuation DCF model Valuation, Fifth Edition stands alone in this field with its reputation of quality and consistency. If you want to hone your valuation skills today and improve them for years to come, look no further than this book.
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Product details

  • Hardback | 840 pages
  • 181 x 259 x 46mm | 1,574g
  • John Wiley & Sons Ltd
  • Chichester, United Kingdom
  • English
  • Revised
  • 5th Revised edition
  • 0470424656
  • 9780470424650
  • 151,819

Flap copy

Corporate finance is simpler and more intuitive than most people think. Yet, executives frequently make decisions that defy the core principles and their own intuition. They subscribe to the common wisdom of "The Street" instead of simple, common financial sense. McKinsey's "Valuation: Measuring and Managing the Value of Companies, Fifth Edition," provides the knowledge executives need to make value-creating decisions--replacing some of the myths that pervade the corporate world with proven principles of value creation. Thoroughly revised and expanded to reflect business conditions in today's volatile global economy, "Valuation, Fifth Edition" provides up-to-date insights and practical advice on how to create, manage, and measure the value of an organization. Along with all new case studies that illustrate how valuation techniques and principles are applied in real-world situations, this comprehensive guide has been updated to reflect the events of the real estate bubble and its effect on stock markets, new developments in corporate finance, changes in accounting rules, and an enhanced global perspective. "Valuation, Fifth Edition" is filled with expert guidance that managers at all levels, investors, and students have come to trust. It contains a solid framework for valuation: Analyzing historical performance, including reorganizing a company's financial statements to reflect economic rather than accounting performance Forecasting performance, with emphasis on not just the mechanics of forecasting but also how to think about a company's future economics Estimating the cost of capital with practical tips that aren't found in textbooks Interpreting the results of a valuation in light of a company's competitive situation Linking a company's valuation multiples to the core drivers of its performance Hailed by financial professionals worldwide as the single best guide of its kind, "Valuation, Fifth Edition" remains true to its roots, with an extensive discussion on the complexity of measuring corporate performance to assess historical financial results properly and to gain insight into a company's ability to create value in the future (its corporate "health"). At the crossroads of corporate strategy and finance lies valuation. Filled with expert guidance and reliable advice, "Valuation, Fifth Edition" enables everyone from the budding professional to the seasoned manager to excel at measuring, managing, and maximizing shareholder and company value.
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Back cover copy

Praise for previous editions The #1 guide to corporate valuation is back . . . and better than ever! "The best valuation book just got better. This edition's greater emphasis on what drives value and how to measure it will improve the way practitioners conduct financial analysis and, ultimately, make strategic decisions. It is required reading for all executives." --Professor Benjamin C. Esty, Harvard Business School, author of "Modern Project Finance: A Casebook" "The bible in its field. Anyone wanting to understand what drives corporate value should read this latest edition." --Dr. Raymund Breu, former chief financial officer, Novartis AG ""Valuation" gets to the heart of how to measure and manage value in a company. Whether you are evaluating an acquisition, restructuring a corporation, or formulating strategy, this book will help you do it well." --John A. Manzoni, Chief Executive Officer, Talisman Energy Inc. "A 'how-to' guide for corporate executives who want to get at the unrealized shareholder values trapped in public companies." --"New York Times" "The book's clarity and comprehensive coverage make it one of the best practitioners' guides to valuation." --"Financial Times"
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Table of contents

About the Authors ix Preface xi Acknowledgments xv Part One Foundations of Value 1 Why Value Value? 3 2 Fundamental Principles of Value Creation 15 3 The Expectations Treadmill 43 4 Return on Invested Capital 57 5 Growth 79 Part Two Core Valuation Techniques 6 Frameworks for Valuation 101 7 Reorganizing the Financial Statements 131 8 Analyzing Performance and Competitive Position 163 9 Forecasting Performance 185 10 Estimating Continuing Value 211 11 Estimating the Cost of Capital 231 12 Moving from Enterprise Value to Value per Share 267 13 Calculating and Interpreting Results 287 14 Using Multiples to Triangulate Results 303 Part Three Intrinsic Value and the Stock Market 15 Market Value Tracks Return on Invested Capital and Growth 325 16 Markets Value Substance, Not Form 345 17 Emotions and Mispricing in the Market 369 18 Investors and Managers in Efficient Markets 385 Part Four Managing for Value 19 Corporate Portfolio Strategy 401 20 Performance Management 415 21 Mergers and Acquisitions 431 22 Creating Value through Divestitures 455 23 Capital Structure 475 24 Investor Communications 511 Part Five Advanced Valuation Issues 25 Taxes 529 26 Nonoperating Expenses, One-Time Charges, Reserves, and Provisions 543 27 Leases, Pensions, and Other Obligations 559 28 Capitalized Expenses 577 29 Inflation 587 30 Foreign Currency 601 31 Case Study: Heineken 615 Part Six Special Situations 32 Valuing Flexibility 657 33 Valuation in Emerging Markets 689 34 Valuing High-Growth Companies 717 35 Valuing Cyclical Companies 731 36 Valuing Banks 741 Appendix A Economic Profit and the Key Value Driver Formula 765 Appendix B Discounted Economic Profit Equals Discounted Free Cash Flow 769 Appendix C Derivation of Free Cash Flow,Weighted Average Cost of Capital, and Adjusted Present Value 773 Appendix D Levering and Unlevering the Cost of Equity 779 Appendix E Leverage and the Price-to-Earnings Multiple 787 Index 791
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About Inc. McKinsey & Company

McKINSEY & COMPANY is a management consulting firm that helps leading corporations and organizations make distinctive, lasting, and substantial improvements in their performance. Over the past seven decades, the firm's primary objective has remained constant: to serve as an organization's most trusted external advisor on critical issues facing senior management. TIM KOLLER is a partner in McKinsey's New York office. Tim has served clients in North America and Europe on corporate strategy and issues concerning capital markets, M&A transactions, and value-based management. He leads the firm's research activities in valuation and capital markets issues. He received his MBA from the University of Chicago. MARC GOEDHART is an associate principal in McKinsey's Amsterdam office. Marc has served clients across Europe on portfolio restructuring, issues concerning capital markets, and M&A transactions. He received a PhD in finance from Erasmus University Rotterdam. DAVID WESSELS is an adjunct professor of finance and director of executive education at the Wharton School of the University of Pennsylvania. Named by BusinessWeek as one of America's top business school instructors, he teaches corporate valuation at the MBA and Executive MBA levels. David received his PhD from the University of California at Los Angeles.
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Rating details

1,176 ratings
4.21 out of 5 stars
5 48% (562)
4 32% (381)
3 15% (180)
2 3% (35)
1 2% (18)
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