Value: The Four Cornerstones of Corporate Finance

Yes it is not easy to read and understand if you are new to the topic. Equally, it is very rewarding! Buy it if you want to know the basics of the corporate finance theory (or at least certain aspects around value).

Brilliant book. Clear and concise.

The book can be read waiting for the next flight. It is quite short and direct. Very clear.A good compnion for the "Valuation" book.

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 performance measurement - "even as markets, economies, and industries change around them"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."

This text covers the simple truths of corporate finance that we all learn through b-school, but forget when sifting through the everyday details.

Si estás en el medio de finanzas o te quieres empezar a involucrar este es el libro #1 con el cual empezar tu colección. Compré the Intelligent investor, Value: the four cornerstones y Makers and takers. Llegaron en tiempo y forma y los tres son increíbles.

In summary, a lot of good insights in a small read. Really worth the time.The Four Cornerstones of Corporate Finance - VALUE by McKinsey & Company was written by three McKinsey consultants, Tom Koller, Richard Dobbs and Bill Huyett and focuses on four factors that drive the value of a company:* The Core of Value: growth, return on capital and the resulting cash flows.* The Conservation of Value: the desire for high cash flows over accounting gimmicks that simply rearrange existing cash flows.* The Expectations Treadmill: how market expectations, as reflected in the stock price, can become the tail wagging a dog's performance.* The Best Owner: how the value of a business is tied to who is managing it, and how management requirements change as the business ages.Traditional capitalist theory holds that above-costs-of-capital returns should be competed away, but the McKinsey team uses their experience and access to the extensive data at the McKinsey Global Institute to show that theory and the real world can be made to part ways.While their explanations of how to optimize value are well detailed, the reader need not be a CPA to come away with key insights.For my part I believe this text is an ideal tool for aligning the strategic thinking of Outside Board members, Executive Management and employees, who actually manufacture the “value” on the same page in terms of how to think about and measure value. I recommend this book to any new clients where I find a lack of symmetry between where the leadership is trying to direct the firm and where the employees are actually taking it. Of all the management books at Amazon, this is the one Shareholders should want on the desks of employees creating value for them.Like most good management books, this one rewards the reader early with insights, and keeps them coming without the drone of a McKinsey sales pitch. Ever since college, I’ve made a point of highlighting and notating almost any book I read. In reviewing my highlighting of this text I note that the examples are, once again, the type which almost anyone can follow. They communicate nuance without losing the lay reader and for this reason I find the text is not only helpful for those working in a large corporate environment, but also helpful for employees building a startup business.In term of getting value for what you paid, this text is a real bargain.

Value - The Four Cornerstones of Corporate Finance is one the best books I have read. The authors are senior consultants with McKinsey & Company. They have covered the subject of value creation in great details from practitioners point of view. The different aspects of value creation by businesses are discussed in great details. The live examples of companies who succeeded or did not succeed in creating long term value are explained throughout the book. The topics such as the best owner and business portfolio are excellent. The book is a must read for investors, business leaders and management consultants. No other book has covered the subject of long term value creation better than this book.

前著Valuationと言っていることは基本的に同じ。ROIC・GROWTHをドライバーにする........そろそろ業界別にROICおよびGROWTHを向上させるノウハウや知見について披歴するとかすれば面白いのだが..そういう披歴は皆無。ただ、データソーサーとして大いに参考になるチャートが散見された。

This book is so good I’ve read it three times to drill the concepts into my mind. I’ve also bought the Kindle version and the hard copy version which is underlined and heavily annotated. It gives the reader a thorough understanding of how to assess, value and understand how good companies operate and create value, and why lousy companies often out-perform great companies in the stock markets. (It all has to do with expectations).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.