Valuation: Measuring and Managing the Value of Companies, Fourth Edition [Hardcover]

McKinsey & Company Inc. (Author), Tim Koller (Author), Marc Goedhart (Author), David Wessels (Author)

Book Description

Series: Wiley Finance | Publication Date: June 8, 2005

Hailed by financial professionals worldwide as the single best guide of its kind, Valuation, Fourth Edition is thoroughly revised and expanded to reflect business conditions in today's volatile global economy. Valuation provides up-to-date insights and practical advice on how to create, manage, and measure an organization's value. 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 Internet bubble and its effect on stock markets, new developments in academic finance, changes in accounting rules (both U. S. and IFRS), and an enhanced global perspective. This edition contains the solid framework that managers at all levels, investors, and students have come to trust.

Editorial Reviews

From the Inside Flap

At the crossroads of corporate strategy and finance lies valuation. And in today's economy—whether you're a seasoned manager or a budding business professional—it's essential to excel at measuring, managing, and maximizing shareholder and company value. Valuation, hailed by financial professionals worldwide as the single best guide of its kind, will show you how to do just that and much more.

Thoroughly revised and expanded to reflect business conditions in today's volatile global economy, Valuation, Fourth 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 the events of the Internet bubble and its effect on stock markets, new developments in academic finance, changes in accounting rules (both U. S. and IFRS), and an enhanced global perspective.

Valuation, Fourth 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 reorgan-izing 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

Valuation, Fourth 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"). A complementary chapter advises managers how to run companies to create long-term value, and a new chapter explores ways to improve communication with financial markets.

Valuation, Fourth Edition stands alone in this field with its reputation of quality and consistency. The author team of Tim Koller, Marc Goedhart, and David Wessels has taken the latest insights from their experiences working with global companies and created one of the most engaging and insightful guides to valuation. If you want to hone your valuation skills today and improve them for years to come, look no further than the Fourth Edition of Valuation.

From the Back Cover

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, 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 plc

Praise 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

See all Editorial Reviews

Product Details

• Hardcover: 768 pages
• Publisher: Wiley; 4 edition (June 8, 2005)
• Language: English
• ISBN-10: 0471702188
• ISBN-13: 978-0471702184
• Product Dimensions: 10.4 x 7.5 x 1.8 inches
• Shipping Weight: 3.2 pounds
• Average Customer Review: 4.3 out of 5 stars  See all reviews (20 customer reviews)
• Amazon Best Sellers Rank: #92,998 in Books (See Top 100 in Books)

More About the Author

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.

Customer Reviews

Most Helpful Customer Reviews

10 of 11 people found the following review helpful:

3.0 out of 5 stars comprehensive, academic, March 15, 2009

By 

HiFi - See all my reviews

This review is from: Valuation: Measuring and Managing the Value of Companies, Fourth Edition (Hardcover)

I work for one of the largest banks in the US, and we use this book as a reference when we need to dig into the more arcane details of a project. If you do a lot of valuation work, this is a recommended text, but it is tome-like and a bit laborious to use, and I've found much of the advice it contains is rather ivory tower and not-so-practical in real world situations. If you are studying valuation theory, or do a lot of this work, particularly on publicly-held companies, you'll definitely want this textbook, though over time it might not be the one you reach for everyday. To accompany it, I would suggest also buying Horn's "Unlocking the Value of a Business" for everyday use, which is a more concise and user-friendly manual on privately-held company valuation, with a more lighthearted, less-academic tone, and Horn's credentials as an acquisitions dealmaker yield advice that is decidedly more practical.

15 of 20 people found the following review helpful:

5.0 out of 5 stars Valuation bible!, July 12, 2005

By 

An investment book reader (St. Louis, MO) - See all my reviews

This review is from: Valuation: Measuring and Managing the Value of Companies, Fourth Edition (Hardcover)

Have used the book for years and this may be the best update yet. The case studies alone are simply fascinating. The global nature make it invaluable for everyone in business anywhere. New discussions on return on capital and growth are must-read.

2 of 2 people found the following review helpful:

5.0 out of 5 stars Best Valuation Book, March 21, 2008

By 

Saladi Naidu (Minneapolis, MN) - See all my reviews
(REAL NAME)   

This review is from: Valuation: Measuring and Managing the Value of Companies, Fourth Edition (Hardcover)

It was suggested as reference book for my course. Once you start reading this book, you will get involved in concepts. Authors have used real world examples and very methodical in approaching the concepts.