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
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.
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.
Table of Contents
About the Authors.
Preface.
Acknowledgments.
Part One Foundations of Value.
1 Why ValueValue?
2 Fundamental Principles of Value Creation.
3 The Expectations Treadmill.
4 Return on Invested Capital.
5 Growth.
Part Two Core Valuation Techniques.
6 Frameworks for Valuation.
7 Reorganizing the Financial Statements.
8 Analyzing Performance and Competitive Position.
9 Forecasting Performance.
10 Estimating Continuing Value.
11 Estimating the Cost of Capital.
12 Moving from Enterprise Value to Value per Share.
13 Calculating and Interpreting Results.
14 Using Multiples to Triangulate Results.
Part Three Intrinsic Value and the Stock Market.
15 Market Value Tracks Return on Invested Capital and Growth.
16 Markets Value Substance, Not Form.
17 Emotions and Mispricing in the Market.
18 Investors and Managers in Efficient Markets.
Part Four Managing for Value.
19 Corporate Portfolio Strategy.
20 Performance Management.
21 Mergers and Acquisitions.
22 Creating Value through Divestitures.
23 Capital Structure.
24 Investor Communications.
Part Five Advanced Valuation Issues.
25 Taxes.
26 Nonoperating Expenses, One-Time Charges, Reserves, and Provisions.
27 Leases, Pensions, and Other Obligations.
28 Capitalized Expenses.
29 Inflation.
30 Foreign Currency.
31 Case Study: Heineken.
Part Six Special Situations.
32 Valuing Flexibility.
33 Valuation in Emerging Markets.
34 Valuing High-Growth Companies.
35 Valuing Cyclical Companies.
36 Valuing Banks.
Appendix A Economic Profit and the Key Value Driver Formula.
Appendix B Discounted Economic Profit Equals Discounted Free Cash Flow.
Appendix C Derivation of Free Cash Flow,Weighted Average Cost of Capital, and
Adjusted Present Value.
Appendix D Levering and Unlevering the Cost of Equity.
Appendix E Leverage and the Price-to-Earnings Multiple.
Index.
811 pages, Hardcover