Tim Koller, a partner at McKinsey with over 40 years of experience in corporate finance, and Marc Goedhart, a professor of corporate valuation at Erasmus University, share their insights on the latest edition of their valuation book. They discuss the evolution of valuation concepts amid market uncertainties, emphasizing long-term value creation over short-term gains. The duo explores the differences between private and public company valuations, the impact of market bubbles, and the importance of data-driven decision-making for sustainable growth.
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volunteer_activism ADVICE
Prioritize a Strong Fact Base
Use a strong fact base to simplify management decisions and reduce endless debates.
Lack of facts leads to philosophy and opinions, making decisions harder.
insights INSIGHT
Timeless Focus on Long-Term Value
Long-term value creation remains the consistent key message for valuation.
Satisfying stakeholders like customers and regulators is essential for sustainable cash flow and growth.
volunteer_activism ADVICE
Value Through Cash Flow Drivers
Focus valuation on cash flows driven by long-term revenue growth and return on capital.
Avoid myths like focusing mainly on accounting earnings per share which mislead true value.
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This book provides crucial insights into how to measure, manage, and maximize a company's value. It includes strategies for multibusiness valuation, corporate restructuring, mergers, and acquisitions, along with detailed case studies. The authors offer practical advice on applying valuation principles to create real economic value for shareholders.
Measuring value creation is critical, as company leaders grapple with geopolitical shifts, digital disruption, and other trends affecting their businesses. Two co-authors of the new edition of Valuation: Measuring and Managing the Value of Companies join Sean today to discuss what they’ve learned over the course of writing and updating their book, which is now in its eighth edition, with more than 1 million copies sold worldwide
Author Tim Koller is a core leader in our Corporate Finance Practice and a Partner in our Denver office. In more than 40 years of consulting, he’s served clients globally on corporate strategy, capital markets, acquisitions, divestitures, and resource allocation. Co-author Marc Goedhart is a senior expert in our Strategy and Corporate Finance Practice based in Amsterdam. He’s also an endowed professor of corporate valuation at the Rotterdam School of Management at Erasmus University in the Netherlands.
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