Valuation: Measuring and Managing the Value of Companies, 5th Edition

by McKinsey & Company Inc.; Tim Koller; Marc Goedhart; David Wessels

• ISBN13: 9780470889916
• ISBN10: 0470889918
• Format: eBook
• Copyright: 2010-07-01
• Publisher: Wiley

Summary

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

Table of Contents

About the Authors

Preface

Acknowledgments

Foundations of Value

WhyValueValue?

Fundamental Principles of Value Creation

The Expectations Treadmill

Return on Invested Capital

Growth

Core Valuation Techniques

Frameworks for Valuation

Reorganizing the Financial Statements

Analyzing Performance and Competitive Position

Forecasting Performance

Estimating Continuing Value

Estimating the Cost of Capital

Moving from Enterprise Value to Value per Share

Calculating and Interpreting Results

Using Multiples to Triangulate Results

Intrinsic Value and the Stock Market

Market Value Tracks Return on Invested Capital and Growth

Markets Value Substance, Not Form

Emotions and Mispricing in the Market

Investors and Managers in Efficient Markets

Managing for Value

Corporate Portfolio Strategy

Performance Management

Mergers and Acquisitions

Creating Value through Divestitures

Capital Structure

Investor Communications

Advanced Valuation Issues

Taxes

Nonoperating Expenses, One-Time Charges, Reserves, and Provisions

Leases, Pensions, and Other Obligations

Capitalized Expenses

Inflation

Foreign Currency

Case Study: Heineken

Special Situations

Valuing Flexibility

Valuation in Emerging Markets

Valuing High-Growth Companies

Valuing Cyclical Companies

Valuing Banks

Economic Profit and the Key Value Driver Formula

Discounted Economic Profit Equals Discounted Free Cash Flow

Derivation of Free Cash Flow,Weighted Average Cost of Capital, and Adjusted Present Value

Levering and Unlevering the Cost of Equity

Leverage and the Price-to-Earnings Multiple

Index

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