Corporate leaders are regularly confronted with conventional wisdom and half-truths about value creation. They're given conflicting advice about what will or won't appeal to investors, often contradicting their own judgment about what builds lasting worth in their companies and the economy.
In Value: The Four Cornerstones of Corporate Finance, partners from the management consulting firm of McKinsey & Company describe the basic principles of value creation and their relevance. Internalizing these principles—or cornerstones—gives decision makers the independence and courage they need to challenge conventional wisdom, defy half-truths, and build thriving businesses.
The four cornerstones are:
The Core of Value: a business's value is driven by its growth and return on capital, and resulting cash flows
The Conservation of Value: value is created when companies generate higher cash flows, not by simply rearranging investors' claims on cash flows
The Expectations Treadmill: movements in company share prices reflect changes in the stock market's expectations, not just underlying performance
The Best Owner: the value of a business is not an absolute but, rather, depends on who is managing it and the strategy pursued
While there are many books that cover selected topics within corporate finance—often for specialized practitioners—it's the rare book that offers leaders a unifying viewpoint of business. Value is that book.
The concepts are very well presented, the text very well written.
This book is highly recommended to specialized practitioners in corporate finance and corporate leaders across different industries.
With portfolio theory, the authors explain how the best owner principle should drive what businesses a company operates.
An embarrassment. This should be two paragraph article in a magazine or newspaper.Published 1 month ago by S. Harris
Highly recommended for people staring their careers in corporate finance. This book provides clear principles and guidelines (along with analytical evidence) that would enable... Read morePublished 4 months ago by suyash jain
I'm an accounting major. I was definitely not interested in finance at all before. This book is an interesting read. It is good addition for the dry textbook. Read morePublished 7 months ago by Damian Marynski
I purchased this book to help facilitate a discussion of corporate value with my staff. The book in total is very strong. Read morePublished 8 months ago by Jesse Lee Boyd
This is an excellent reference book defining the concept of Value and using that for value investing. McKinsey is of course an authority.Published 10 months ago by John Morlier
More than twenty years ago McKinsey & Company published the book Valuation. It became the de facto required reading for the coming generations of aspiring young equity analysts and... Read morePublished 19 months ago by investingbythebooks
nice good great very good very good looks good nice great i'm gonna get big great good nice lets get bigPublished 21 months ago by A. Haider
All organizations need a solid foundation on which their executives can base their most important decisions about strategy, mergers and acquisitions, budgets, financial policy, and... Read morePublished on May 31, 2012 by Robert Morris
Another very good book from McKinsey on valuation. In contrast with the long acclaimed "Valuation: Measuring and Managing the Value of Companies", this book offers a clear view on... Read morePublished on March 23, 2012 by Corso