Not all CEOs, business managers, and financial managers possess a deep understanding of value, although it is essential knowledge to creating value for companies and shareholders. Mc
Kinsey's Valuation: Measuring and Managing the Value of Companies, Sixth 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, Sixth Edition
provides up-to-date insights and practical advice on how to create, manage, and measure the value of an organization. The Sixth Edition
- An overview of the two core principles of valuation: the idea that return on invested capital and growth drive cash flow, and a conversation principle that anything that doesn't increase cash flow doesn't create value (unless it reduces risk).
- A self-contained handbook for using discounted cash flow (DCF) to value a company, with an emphasis on how to analyze historical performance, forecast free cash flows, estimate the appropriate opportunity cost of capital, identify sources of value, and interpret results.
- An explanation of how to analyze and incorporate in your valuation such complex issues as taxes, pensions, reserves, inflation, and foreign currency, complete with a case-study example.
- A framework for value creation built upon designing a portfolio of businesses, executing strategic M&A decisions and divestitures, and aligning appropriate capital structure and proper communication of business strategy with the financial markets.
- An exploration of special situations in which valuation is complex, such as the multi-dimensional challenges of valuing higher growth companies, emerging markets, cyclical companies, and banks; or in the use of option-pricing theory and decision trees in valuations.
Acclaimed for 25 years by corporate finance experts as the best guide in its class, Valuation, Sixth Edition
explains, step-by-step, how to do valuation well. Business managers will learn how to decide among alternative business strategies by estimating the value of each strategic choice; how to assess major transactions such as acquisitions, divestitures, and restructurings; how to design an effective capital structure to support the corporation's strategy and minimize the risk of financial distress; and how to create value and improve corporate performance.