McKinsey & Company's #1 best-selling guide to corporate valuation the fully updated seventh edition Valuation has been the foremost resource for measuring company value for nearly three decades. Now in its seventh edition, this acclaimed volume continues to help financial professionals around the world gain a deep understanding of valuation and help their companies create, manage, and maximize economic value for their shareholders. This latest edition has been carefully revised and updated throughout, and includes new insights on topics such as digital, ESG (environmental, social and governance), and long-term investing, as well as fresh case studies. Clear, accessible chapters cover the fundamental principles of value creation, analyzing and forecasting performance, capital structure and dividends, valuing high-growth companies, and much more. The Financial Times calls the book one of the practitioners best guides to valuation. This book: Provides complete, detailed guidance on every crucial aspect of corporate valuation Explains the strategies, techniques, and nuances of valuation every manager needs to know Covers both core and advanced valuation techniques and management strategies Features/Includes a companion website that covers key issues in valuation, including videos, discussions of trending topics, and real-world valuation examples from the capital markets For over 90 years, McKinsey & Company has helped corporations and organizations make substantial and lasting improvements in their performance. Through seven editions and 30 years, Valuation: Measuring and Managing the Value of Companies, has served as the definitive reference for finance professionals, including investment bankers, financial analysts, CFOs and corporate managers, venture capitalists, and students and instructors in all areas of finance.

McKinsey & Company's #1 best-selling guide to corporate valuation--the fully updated seventh editionValuation has been the foremost resource for measuring company value for nearly three decades. Now in its seventh edition, this acclaimed volume continues to help financial professionals around the world gain a deep understanding of valuation and help their companies create, manage, and maximize economic value for their shareholders.This latest edition has been carefully revised and updated throughout, and includes new insights on topics such as digital, ESG (environmental, social and governance), and long-term investing, as well as fresh case studies.Clear, accessible chapters cover the fundamental principles of value creation, analyzing and forecasting performance, capital structure and dividends, valuing high-growth companies, and much more. The Financial Times calls the book "one of the practitioners' best guides to valuation."This book:* Provides complete, detailed guidance on every crucial aspect of corporate valuation* Explains the strategies, techniques, and nuances of valuation every manager needs to know* Covers both core and advanced valuation techniques and management strategies* Features/Includes a companion website that covers key issues in valuation, including videos, discussions of trending topics, and real-world valuation examples from the capital marketsFor over 90 years, McKinsey & Company has helped corporations and organizations make substantial and lasting improvements in their performance. Through seven editions and 30 years, Valuation: Measuring and Managing the Value of Companies, has served as the definitive reference for finance professionals, including investment bankers, financial analysts, CFOs and corporate managers, venture capitalists, and students and instructors in all areas of finance.

About the Authors ixPreface xiAcknowledgments xvPart One Foundations of Value1 Why Value Value? 32 Finance in a Nutshell 173 Fundamental Principles of Value Creation 274 Risk and the Cost of Capital 555 The Alchemy of Stock Market Performance 696 Valuation of ESG and Digital Initiatives 837 The Stock Market is Smarter Than You Think 998 Return on Invested Capital 1279 Growth 155Part Two Core Valuation Techniques10 Frameworks for Valuation 17711 Reorganizing the Financial Statements 20512 Analyzing Performance 23913 Forecasting Performance 25914 Estimating Continuing Value 28515 Estimating the Cost of Capital 30516 Moving from Enterprise Value to Value per Share 33517 Analyzing the Results 35718 Using Multiples 36719 Valuation by Parts 391Part Three Advanced Valuation Techniques20 Taxes 41321 Nonoperating Items, Provisions, and Reserves 42722 Leases 44323 Retirement Obligations 45724 Measuring Performance in Capital-Light Businesses 46725 Alternative Ways to Measure Return on Capital 48326 Inflation 49327 Cross-Border Valuation 507Part Four Managing for Value28 Corporate Portfolio Strategy 52729 Strategic Management: Analytics 54730 Strategic Management: Mindsets and Behaviors 57131 Mergers and Acquisitions 58532 Divestitures 61333 Capital Structure, Dividends, and Share Repurchases 63334 Investor Communications 667Part Five Special Situations35 Emerging Markets 69136 High-Growth Companies 70937 Cyclical Companies 72538 Banks 73339 Flexibility 759Appendix A Discounted Economic Profit Equals Discounted Free Cash Flow 793Appendix B Derivation of Free Cash Flow, Weighted Average Cost of Capital, and Adjusted Present Value 799Appendix C Levering and Unlevering the Cost of Equity 805Appendix D Leverage and the Price-to-Earnings Multiple 813Appendix E Other Capital Structure Issues 817Appendix F Technical Issues in Estimating the Market Risk Premium 823Appendix G Global, International, and Local CAPM 827Appendix H A Valuation of Costco Wholesale 835Appendix I Two-Stage Formula for Continuing Value 859Index 861