Valuation: Measuring and Managing the Value of Companies, 4th Edition

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

• ISBN13: 9780471702191
• ISBN10: 0471702196
• Edition: 4th
• Format: Hardcover
• Copyright: 2005-06-01
• Publisher: Wiley

Summary

VALUATION, Fourth Edition with CD-ROMThe #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, 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 Refining and Marketing, BP plcPraise for the First Edition"A 'how-to' guide for corporate executives who want to get at the unrealized shareholder values trapped in public companies." -The New York Times"The book's clarity and comprehensive coverage make it one of the best practitioners' guides to valuation." -Financial Times

Author Biography

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.

Table of Contents

Part One Foundations of Value
Why Maximize Value?	3	(20)
The Value Manager	23	(24)
Fundamental Principles of Value Creation	47	(22)
Do Fundamentals Really Drive the Stock Market?	69	(32)
Part Two Core Valuation Techniques
Frameworks for Valuation	101	(32)
Thinking about Return on Invested Capital and Growth	133	(26)
Analyzing Historical Performance	159	(70)
Forecasting Performance	229	(42)
Estimating Continuing Value	271	(20)
Estimating the Cost of Capital	291	(40)
Calculating and Interpreting Results	331	(30)
Using Multiples for Valuation	361	(22)
Part Three Making Value Happen
Performance Measurement	383	(22)
Performance Management	405	(22)
Creating Value through Mergers and Acquisitions	427	(26)
Creating Value through Divestitures	453	(22)
Capital Structure	475	(34)
Investor Communications	509	(22)
Part Four Advanced Valuation Issues
Valuing Multibusiness Companies	531	(12)
Valuing Flexibility	543	(32)
Cross-Border Valuation	575	(30)
Valuation in Emerging Markets	605	(32)
Valuing High-Growth Companies	637	(16)
Valuing Cyclical Companies	653	(10)
Valuing Financial Institutions	663	(30)
Appendix A Economic Profit and the Key Value Driver Formula	693	(4)
Appendix B Discounted Economic Profit Equals Discounted Free Cash Flow	697	(4)
Appendix C Adjusted Present Value Equals Discounted Free Cash Flow	701	(6)
Appendix D Levering and Unlevering the Cost of Equity	707	(8)
Appendix E Leverage and the Price-Earnings Multiple	715	(4)
About the CD-ROM	719	(2)
Index	721