Valuation: Measuring and Managing Company Value, 7th Ed.

The Problem This Book Solves

Corporate value creation is the single most important metric for long-term business success—yet most executives, analysts, and investors struggle to measure it accurately. Without a disciplined valuation framework, capital allocation decisions become guesswork, M&A strategies fail, and shareholder returns stagnate. The core problem is clear: companies that cannot reliably quantify value creation inevitably destroy it. This book provides the systematic, data-driven method to solve that problem.

Written by the corporate finance experts at McKinsey & Company, the Valuation 7th edition offers a battle-tested approach to measuring and managing the value of firms—whether you are evaluating a single division, a full acquisition target, or your own organization’s strategic plan.

What Is Valuation: Measuring and Managing the Value of Companies? A Complete Overview

Valuation is the definitive guide to corporate valuation, now in its seventh edition. It distills decades of McKinsey’s consulting experience into a rigorous framework that aligns financial theory with real-world practice. The book’s central message is simple: companies thrive when they create real economic value for their shareholders by investing capital at rates of return that exceed their cost of capital.

This edition covers everything from foundational discounted cash flow (DCF) models to advanced topics such as valuing high-growth companies, financial institutions, and multinational corporations. It includes practical templates, case studies, and step-by-step instructions that make the concepts immediately actionable.

Who Should Read Valuation, 7th Edition?

This book is essential for anyone involved in corporate finance, investment analysis, or strategic decision-making. It directly serves:

• Finance professionals – Analysts, associates, and CFOs who need a rigorous valuation toolkit
• Investment bankers and M&A advisors – Those executing mergers, acquisitions, and divestitures
• Portfolio managers and equity analysts – Professionals assessing intrinsic value for investment decisions
• Business strategists – Leaders evaluating organic growth vs. capital allocation alternatives
• Graduate students – MBA and finance master’s candidates studying corporate finance and valuation
• Entrepreneurs and founders – Those seeking to maximize company value or raise capital
• Board members – Directors overseeing major transactions and capital plans

If your work involves understanding what drives corporate value, this book is your definitive reference.

7 Key Things You Will Learn

By working through this edition, you will master the following critical skills and insights:

1. How to estimate the cost of capital accurately using capital asset pricing models and market-data inputs
2. Building robust discounted cash flow models that forecast free cash flows and terminal value
3. Applying economic profit frameworks to measure value creation beyond accounting earnings
4. Valuing high-growth companies and early-stage ventures where traditional multiples fail
5. Adjusting for country risk, inflation, and currency effects in cross-border valuations
6. Using value-based management (VBM) to drive strategic decisions and performance measurement
7. Interpreting valuation results for M&A, IPO pricing, and shareholder communication

Each chapter includes detailed examples and real company data that reinforce the concepts.

Why Valuation Outperforms Every Alternative

Other valuation books—such as Damodaran on Valuation or The Little Book of Valuation—offer strong theory but often lack the operational depth that McKinsey brings. The Valuation 7th edition stands apart because it is written by practitioners who have advised hundreds of the world’s largest corporations. The frameworks are not abstract; they have been refined through thousands of client engagements. No other resource combines the same level of institutional credibility, rigor, and real-world applicability.

Additionally, this edition includes updates on valuation in the digital economy, intangible assets, and environmental, social, and governance (ESG) factors—areas where competing texts are often silent.

Author Authority & Publisher Credibility

McKinsey & Company is the world’s most prestigious management consulting firm, with decades of expertise in corporate finance and strategy. The authors—Tim Koller, Marc Goedhart, and David Wessels—are partners and thought leaders within McKinsey’s corporate finance practice. Their combined experience spans valuations across industries and geographies, making this book an authoritative source of industry best practices. The 7th edition is published by John Wiley & Sons, Inc., a global leader in professional and educational publishing. This partnership ensures that the content meets the highest standards of editorial accuracy and technical depth.

Trust in this resource is reinforced by its widespread adoption: it is used in leading MBA programs and by finance professionals at top investment banks, private equity firms, and Fortune 500 companies worldwide.

Is Valuation Worth It? Our Verdict

Unequivocally yes. For any serious finance professional, the Valuation 7th edition is not just a book—it is a career accelerator. The practical frameworks save you years of trial and error, while the McKinsey lens gives you a competitive edge in analysis and communication. The cost of capital and value creation lessons alone can pay for the book many times over in better investment decisions and higher-quality work product. Whether you are preparing for a critical board presentation, evaluating a $1 billion acquisition, or simply deepening your financial acumen, this is the most efficient use of your time and money.

Get Your Copy of Valuation, 7th Edition – Master Corporate Valuation Today

Stop relying on guesswork or oversimplified multiples. The Valuation 7th edition equips you with the exact tools McKinsey uses to advise the world’s top companies. As a finance professional, student, or executive, you need a valuation framework that is both rigorous and practical—and this book delivers. Order today to gain instant access to the most trusted resource in corporate valuation. Published in 2020 by Wiley, this edition remains the current standard for valuation best practices. Get your digital copy now and start creating measurable value.