{"product_id":"value-isbn-9780470424605","title":"Value","description":"\u003cb\u003eAn accessible guide to the essential issues of corporate finance\u003c\/b\u003e  \u003cp\u003eWhile 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.\u003c\/p\u003e \u003cp\u003e\u003ci\u003eValue\u003c\/i\u003e 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 \u0026amp; Company, this reliable resource takes a much more qualitative approach to what the authors consider a lost art.\u003c\/p\u003e \u003cul\u003e \u003cli\u003eDiscusses the four foundational principles of corporate finance\u003c\/li\u003e \u003cli\u003eEffectively applies the theory of value creation to our economy\u003c\/li\u003e \u003cli\u003eExamines ways to maintain and grow value through mergers, acquisitions, and portfolio management\u003c\/li\u003e \u003cli\u003eAddresses how to ensure your company has the right governance, performance measurement, and internal discussions to encourage value-creating decisions\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eA perfect companion to the \u003ci\u003eFifth Edition\u003c\/i\u003e of \u003ci\u003eValuation,\u003c\/i\u003e this book will put the various issues associated with corporate finance in perspective.\u003c\/p\u003e \u003cp\u003eAbout the Authors ix\u003c\/p\u003e \u003cp\u003ePreface xi\u003c\/p\u003e \u003cp\u003eAcknowledgments xv\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart One The Four Cornerstones\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e1 Why Value Value? 3\u003cbr\u003e\u003c\/b\u003eMany companies make decisions that compromise value in the name of creating value. But with courage and independence, executives can apply the four cornerstones of finance to make sound decisions that lead to lasting value creation.\u003c\/p\u003e \u003cp\u003e\u003cb\u003e2 The Core of Value 15\u003cbr\u003e\u003c\/b\u003e\u003ci\u003eReturn on capital \u003c\/i\u003eand \u003ci\u003egrowth \u003c\/i\u003eare the twin drivers of value creation, but they rarely matter equally. Sometimes raising returns matters more, whereas other times accelerating growth matters more.\u003c\/p\u003e \u003cp\u003e\u003cb\u003e3 The Conservation of Value 29\u003cbr\u003e\u003c\/b\u003eYou can create the illusion of value or you can create real value. Sometimes acquisitions and financial engineering schemes create value, and sometimes they don’t. No matter how you slice the financial pie, only improving cash flow creates value.\u003c\/p\u003e \u003cp\u003e\u003cb\u003e4 The Expectations Treadmill 41\u003cbr\u003e\u003c\/b\u003eNo company can perpetually outperform the stock market’s expectations. When a company outperforms, expectations rise, forcing it to do better just to keep up. The treadmill explains why the share prices of high performing companies sometimes falter, and vice versa.\u003c\/p\u003e \u003cp\u003e\u003cb\u003e5 The Best Owner 51\u003cbr\u003e\u003c\/b\u003eNo company has an objective, inherent value. A target business is worth one amount to one owner and other amounts to other potential owners—depending on their relative abilities to generate cash flow from the business.\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Two The Stock Market\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e6 Who Is the Stock Market? 63\u003cbr\u003e\u003c\/b\u003eConventional wisdom segments investors into pigeonholes like \u003ci\u003egrowth \u003c\/i\u003eand \u003ci\u003evalue\u003c\/i\u003e, but these distinctions are erroneous. There’s a more insightful way to classify investors, and doing so culls out those who matter most to the value-minded executive.\u003c\/p\u003e \u003cp\u003e\u003cb\u003e7 The Stock Market and the Real Economy 73\u003cbr\u003e\u003c\/b\u003eThe performance of stock markets and real economies are typically aligned, hardly ever perfectly aligned, and rarely very misaligned. Executives and investors who understand this are better able to make value-creating decisions. \u003cbr\u003e\u003cbr\u003e\u003cb\u003e8 Stock Market Bubbles 89\u003cbr\u003e\u003c\/b\u003eStock market bubbles are rare and usually confined to specific industry sectors and companies. Knowing why and when bubbles occur can keep management focused on making sound strategic decisions based on a company’s intrinsic value.\u003c\/p\u003e \u003cp\u003e\u003cb\u003e9 Earnings Management 103\u003cbr\u003e\u003c\/b\u003eTrying to smooth earnings is a fool’s game that can backfire and, in some cases, destroy value. Creating value in the longer run sometimes necessitates decisions that reduce earnings in the shorter run.\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Three Managing Value Creation\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e10 Return on Capital 119\u003cbr\u003e\u003c\/b\u003eA company can’t sustain a high return on capital in the absence of an attractive industry structure and a clear competitive advantage. Yet it’s surprising how few executives can pinpoint the competitive advantages that drive their companies’ returns.\u003c\/p\u003e \u003cp\u003e\u003cb\u003e11 Growth 139\u003cbr\u003e\u003c\/b\u003eIt’s difficult to create value without growing, but growth alone doesn’t necessarily create value. It all depends on what type of growth a company achieves and what the returns on that growth are.\u003c\/p\u003e \u003cp\u003e\u003cb\u003e12 The Business Portfolio 153\u003cbr\u003e\u003c\/b\u003eA company’s destiny is largely synonymous with the businesses it owns, and actively managed portfolios outperform passively managed portfolios. Sometimes companies can create value by selling even high-performing businesses.\u003c\/p\u003e \u003cp\u003e\u003cb\u003e13 Mergers and Acquisitions 169\u003cbr\u003e\u003c\/b\u003eMost acquisitions create value, but typically the acquirer’s shareholders only get a small portion of that value, while the lion’s share goes to the target’s shareholders. But there are archetypal ways that acquirers can create value.\u003c\/p\u003e \u003cp\u003e\u003cb\u003e14 Risk 183\u003cbr\u003e\u003c\/b\u003eNothing in business is more clear yet complex than the imperative to manage risk. Clear because risk matters greatly to the company, its board, its investors, and its decision makers. Complex because each of these groups has a different perspective.\u003c\/p\u003e \u003cp\u003e\u003cb\u003e15 Capital Structure 197\u003cbr\u003e\u003c\/b\u003eGetting capital structure right is important but doesn’t necessarily create value—while getting capital structure wrong can destroy tremendous value. When it comes to financial structures, companies are best to keep them as simple as possible.\u003c\/p\u003e \u003cp\u003e\u003cb\u003e16 Investor Communications 209\u003cbr\u003e\u003c\/b\u003eGood investor communications can ensure that a company’s share price doesn’t become misaligned with its intrinsic value. And communication isn’t just one way: executives should listen selectively to the right investors as much as they tell investors about the company.\u003c\/p\u003e \u003cp\u003e\u003cb\u003e17 Managing for Value 223\u003cbr\u003e\u003c\/b\u003eIt’s not easy to strike the right balance between shorter-term financial results and longer-term value creation—especially in large, complex corporations. The trick is to cut through the clutter by making your management processes more granular and transparent.\u003c\/p\u003e \u003cp\u003eAppendix A The Math of Value 237\u003c\/p\u003e \u003cp\u003eAppendix B The Use of Earnings Multiples 241\u003c\/p\u003e \u003cp\u003eIndex 245\u003c\/p\u003e  \u003cp\u003e\"... marches the reader through the very practical issues that affect value.\" (\u003cem\u003eFinancial Times,\u003c\/em\u003e November 2010)   \u003c\/p\u003e\u003cp\u003e\u003cb\u003eMcKINSEY \u0026amp; COMPANY\u003c\/b\u003e is a global management consulting firm that helps leading private, public, and social-sector organizations make distinctive, lasting, and substantial performance improvements. With consultants deployed from more than ninety offices in over fifty countries, McKinsey advises companies on strategic, operational, organizational, financial, and technological issues. \u003c\/p\u003e\u003cp\u003e\u003cb\u003eTIM KOLLER\u003c\/b\u003e leads the firm’s research activities in valuation and capital market issues. He advises clients globally on corporate strategy, capital markets, M\u0026amp;A, and value-based management. Tim is a coauthor of \u003ci\u003eValuation: Measuring and Managing the Value of Companies\u003c\/i\u003e. \u003c\/p\u003e\u003cp\u003e\u003cb\u003eRICHARD DOBBS\u003c\/b\u003e is a director of the McKinsey Global Institute, the firm’s business and economics research arm. He advises Korean and other Asian companies and governments on strategy, economics, and M\u0026amp;A issues. Richard is an associate fellow of University of Oxford’s Saïd Business School. \u003c\/p\u003e\u003cp\u003e\u003cb\u003eBILL HUYETT\u003c\/b\u003e advises clients in healthcare and other technology-intensive industries on corporate strategy, M\u0026amp;A, product development and commercialization, and corporate leadership. Bill is active on several not-for-profit boards in basic life sciences research.   \u003c\/p\u003e\u003cp\u003eFrom the team behind \u003ci\u003eValuation\u003c\/i\u003e—the #1 bestselling reference on corporate finance—comes a decision-making guide for all executives to use as they create, manage, and sustain shareholder value. \u003c\/p\u003e\u003cp\u003eCorporate 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.  \u003c\/p\u003e\u003cp\u003eIn \u003ci\u003eValue: The Four Cornerstones of Corporate Finance\u003c\/i\u003e, partners from the management consulting firm of McKinsey \u0026amp; 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.  \u003c\/p\u003e\u003cp\u003eThe four cornerstones are: \u003c\/p\u003e\u003cul\u003e\n\u003cli\u003e\n\u003cb\u003eThe Core of Value:\u003c\/b\u003e a business’s value is driven by its growth and return on capital, and resulting cash flows\u003c\/li\u003e \u003cli\u003e\n\u003cb\u003eThe Conservation of Value:\u003c\/b\u003e value is created when companies generate higher cash flows, not by simply rearranging investors’ claims on cash flows\u003c\/li\u003e \u003cli\u003e\n\u003cb\u003eThe Expectations Treadmill:\u003c\/b\u003e movements in company share prices reflect changes in the stock market’s expectations, not just underlying performance\u003c\/li\u003e \u003cli\u003e\n\u003cb\u003eThe Best Owner:\u003c\/b\u003e the value of a business is not an absolute but, rather, depends on who is managing it and the strategy pursued\u003c\/li\u003e\n\u003c\/ul\u003e \u003cp\u003eWhile 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. \u003ci\u003eValue\u003c\/i\u003e is that book.   \u003c\/p\u003e\u003cp\u003e\u003ci\u003ePraise for\u003c\/i\u003e VALUE \u003c\/p\u003e\u003cp\u003e“\u003ci\u003eValue\u003c\/i\u003e 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.”\u003cbr\u003e \u003cb\u003e— Ed Breen, Chairman and Chief Executive Officer, Tyco International Ltd.\u003c\/b\u003e \u003c\/p\u003e\u003cp\u003e“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.”\u003cbr\u003e \u003cb\u003e— Dominic J. Caruso, Chief Financial Officer, Johnson \u0026amp; Johnson \u003c\/b\u003e \u003c\/p\u003e\u003cp\u003e“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.”\u003cbr\u003e \u003cb\u003e— Stefan Krause, Chief Financial Officer, Member of the Management Board, Deutsche Bank AG \u003c\/b\u003e \u003c\/p\u003e\u003cp\u003e“A valuable source of guidance for business leaders who are focused on creating real, lasting value.” \u003cbr\u003e \u003cb\u003e— Mark Loughridge, Senior Vice President and Chief Financial Officer, Finance and Enterprise Transformation, IBM Corporation \u003c\/b\u003e \u003c\/p\u003e\u003cp\u003e“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.”\u003cbr\u003e \u003cb\u003e— Keith S. Sherin, Vice Chairman and Chief Financial Officer, General Electric Company\u003c\/b\u003e \u003c\/p\u003e\u003cp\u003e“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.” \u003cbr\u003e \u003cb\u003e— Rajiv Singh, Vice Chairman, DLF Limited \u003c\/b\u003e \u003c\/p\u003e\u003cp\u003e“\u003ci\u003eValue\u003c\/i\u003e cuts through clutter and myopia to provide a sound foundation for leaders who are building enterprises that thrive and serve society.”\u003cbr\u003e \u003cb\u003e— Daniel Vasella, MD, Chairman, Novartis AG \u003c\/b\u003e\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47990445801701,"sku":"NP9780470424605","price":31.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9780470424605.jpg?v=1761787861","url":"https:\/\/k12savings.com\/es\/products\/value-isbn-9780470424605","provider":"K12savings","version":"1.0","type":"link"}