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Value: The Four Cornerstones of Corporate Finance 1st Edition, Kindle Edition
While you can find numerous books focused on the topic of corporate finance, few offer the type of information managers need to help them make important decisions day in and day out.
Value explores the core of corporate finance without getting bogged down in numbers and is intended to give managers an accessible guide to both the foundations and applications of corporate finance. Filled with in-depth insights from experts at McKinsey & Company, this reliable resource takes a much more qualitative approach to what the authors consider a lost art.
- Discusses the four foundational principles of corporate finance
- Effectively applies the theory of value creation to our economy
- Examines ways to maintain and grow value through mergers, acquisitions, and portfolio management
- Addresses how to ensure your company has the right governance, performance measurement, and internal discussions to encourage value-creating decisions
A perfect companion to the Fifth Edition of Valuation, this book will put the various issues associated with corporate finance in perspective.
From the Inside Flap
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.--This text refers to the hardcover edition.
From the Back Cover
"Value will help senior leaders and their boards act on bold ideas for creating value in the businesses they lead. The four principles of value creation are a concise guide to growing and shaping companies."
—Ed Breen, Chairman and Chief Executive Officer, Tyco International Ltd.
"In a complex business world, we shouldn't overlook the relatively simple financial principles that underlie the creation of long-term shareholder value. This book gives corporate leaders a clear base of knowledge for creating and sustaining value under any economic, industry, or company circumstances."
—Dominic J. Caruso, Chief Financial Officer, Johnson & Johnson
"More than a handbook, this is the bible of value creation. It should be read by corporate leaders across the entire spectrum. It also reminds us not to ignore the abiding financial principles that guide companies to long-term value creation."
—Stefan Krause, Chief Financial Officer, Member of the Management Board, Deutsche Bank AG
"A valuable source of guidance for business leaders who are focused on creating real, lasting value."
—Mark Loughridge, Senior Vice President and Chief Financial Officer, Finance and Enterprise Transformation, IBM Corporation
"A very useful, no-nonsense guide for creating shareholder value. Competition, capital structure, acquisitions, buybacks, dividends, and more—it's all here with straightforward principles and examples."
—Keith S. Sherin, Vice Chairman and Chief Financial Officer, General Electric Company
"If more owners and executives had the overriding objective of long-term value creation—and enough knowledge about how to create it—then our financial world would be a more stable one."
—Rajiv Singh, Vice Chairman, DLF Limited
"Value cuts through clutter and myopia to provide a sound foundation for leaders who are building enterprises that thrive and serve society."
—Daniel Vasella, MD, Chairman, Novartis AG
- ASIN : B0047O2HLK
- Publisher : Wiley; 1st edition (Oct. 26 2010)
- Language : English
- File size : 2828 KB
- Text-to-Speech : Enabled
- Screen Reader : Supported
- Enhanced typesetting : Enabled
- X-Ray : Not Enabled
- Word Wise : Enabled
- Print length : 273 pages
- Page numbers source ISBN : 0470424605
- Best Sellers Rank: #545,975 in Kindle Store (See Top 100 in Kindle Store)
- Customer Reviews:
About the authors
Top reviews from Canada
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Once a thorough grounding in the basics has been established by learning and understanding the concepts explained in this book, I recommend buying Valuation 6th Edition (University Edition) to expand and drill down in more detail into the concepts taught in this book.
Both books are well written and clear. But there’s a lot of material in these two books. Be prepared to take six months to learn and under the concepts taught in these books. It’s a lot of work but well worth the effort. Once you’ve accomplished that, you will probably better understand how to analyze and run a publically trade better than most CEOs and better understand the stock market better than 99% of investors out there.
This book was co-authored by three McKinsey & Company partners -- Tim Koller, Richard Dobbs, and Bill Huyett -- who bring decades of experience and a diversity of perspectives to their rigorous consideration of what they characterize as "the immutable principles of value creation. " These principles are in the best interests not only of shareholders but of [begin italics] everyone else [end italics] directly and indirectly involved in the given enterprise. This is a key point because, more so today than ever before, value addition or reduction can occur at any level and in any area of an organization's operations.
The focus in the book is on the four cornerstones of finance, best revealed within the narrative, in context. (They are introduced and discussed briefly on Pages 4 and 5, then delineated thoroughly through Part One, Chapters 1-5.). These are among the passages that I found most valuable:
o Desegregating cash flow into revenue growth and ROIC (Pages 17-21)
o The best-owner life cycle (55-57)
o Summary of key points re five stock market eras, 1960-2009 (76-83)
o Why accounting treatment won't change underlying value (114-116)
o Trends in return on capital (133-138)
o The logic for systematic divestitures (158-162)
o Why companies should retain at least some risks (189-195)
Most readers (I among them) agree with Koller, Dobbs, and Huyett that the most difficult part of creating value and, specifically, applying and then sustaining the four cornerstones "is getting the right balance between delivering near-term profits and return on capital, and, continuing to invest for long-term value creation. [Not just in fixed assets, but investments that are expensed right away, such as new product development, new geographic markets, and people.] Configuring the management approaches of the company to reflect this balance is the chief executive's responsibility."
Tim Koller, Richard Dobbs, and Bill Huyett provide a wealth of information, insights, and counsel that will serve as "a catalyst and guide for improving how executives plan strategy, make decisions, solve problems, and meanwhile create the next generation of leaders. Ultimately, we hope that the collective impact of more companies embracing these [four] principles creates a more stable and productive economy."
Top reviews from other countries
A good compnion for the "Valuation" book.