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.
I have to begin with a gripe. The first four reviews are implausibly quick, given the length of this book, and are all five-star. Three are from people who reviewed only one product, one is completely devioid of content. The fifth reviewer has reviewed one other product, a razor. I understand the temptation to stuff the ballot-box early by having friends review, but I think you should find real reviewers and insist on some content.
There are several great valuation books out there. Damodaran on Valuation concentrates on security valuation and is the most academic. Business Valuation is the best for small, private companies. Business Valuation on Wall Street tells you how Wall Street approaches the question. Theory of Valuation is the best on theory. Corporate Finance has the best treatment of valuation among corporate finance texts.
Earlier editions of this book were the clear leaders in big and complex public company valuation. There is extensive and detailed instruction for a big team analyzing for a big project, whether it is capital budgeting, capital structure, merger, acquisition, restructuring, bankruptcy or any other valuation topic. It is comprehensive and clear. If you work on this kind of project, you need this book. If you don't work on this kind of project, it can still give you a tremendous amount of insight into the factors that contribute to shareholder value.
The most important improvement in the fifth edition is to go beyond the developed-markets/US-style financial statement presentation to cover emerging market companies in detail. I can't say whether the section is good as I have zero experience in that area, but it sounds right and I trust the authors. The treatment of capital structure and investor relations is considerably improved based on events of the last three years. They also stuck in some useless fluff about the necessity to maximize shareholder value and behavioral finance (I don't mean those aren't interesting areas, just that there's no depth to the presentation in this book, and clearly no real interest by the authors).
One minor gripe is the examples are usually placed around the beginning of 2008, for a book published in 2010. That's a big difference considering what happened in 2008 and 2009. I understand why you don't want to rework every example of a book this big, but some of the projections are downright comical to someone knowing what actually happened. I suppose that might help readers develop humility, at the end of the day, valuation is a matter of opinion based on highly uncertain information about totally unknowable future events. The weight and slick production values of tihs book might cause some to forget that.
Product Details :
Hardcover: 840 pages
Publisher: Wiley; 5 edition (July 26, 2010)
Language: English
ISBN-10: 0470424656
ISBN-13: 978-0470424650
Product Dimensions: 7.6 x 1.8 x 10.3 inches
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