Your Guide To The McKinsey Valuation Fifth Edition Suite

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Your Guide to theMcKinsey Valuation Fifth Edition SuiteThe Best Selling Guide to Corporate Valuation is Back and Better Than Ever! The newMcKinsey Valuation, Fifth Edition Suite is fully updated and revised with a wealth of new features and benefits that make this the go-to-guide that stands apart from the valuation crowd.What’s Inside: McKinsey Valuation Suite of Products Focus on Value What’s New in Valuation, Fifth Edition Valuation, Fifth Edition Table of Contents Focus on Valuation, Fifth Edition Preface to Valuation, Fifth Edition Focus on Valuation Discounted Cash Flow Model, Fifth EditionChapter One of Valuation, Fifth Edition

MCKINSEY VALUATIONFifth Edition#1 BEST-SELLING GUIDE TO CORPORATE VALUATIONFullyUpdated &RevisedMcKinsey Valuation,Fifth EditionValuation, Fifth EditionBook DCF Model DownloadValueBRANDNEW!McKinsey ValuationWorkbook, Fifth EditionMcKinsey ValuationDCF Model CD-ROM,Fifth EditionMcKinsey ValuationUniversity Edition,Fifth EditionInstructors Resources AvailableMcKinsey ’sProven Approach toValuationDetailedCaseStudiesEnd of ChapterStep-by-stepSummaries & Review ExercisesQuestionsand SolutionsInteractiveValuationExcel ModelC-SuiteApproach toValuationDesigned forClassroomUse

What’s New InValuation, Fifth EditionUPDATED TO REFLECT RECENT EVENTS, including the credit crisis andglobal economic recession, and puts into context their effects on companyperformance and the stock marketNEW CASE EXAMPLES that illustrate application of techniques to real-worldsituationsADDITIONAL NEW MATERIAL on linkage between strategy and valuecreationNEW CHAPTERS on advanced valuation topicsMORE DETAILED ANALYSIS AND DATA on return on capital and growthUPDATED TO REFLECT CHANGES in accounting rules

McKinsey Valuation, Fifth EditionMeasuring and Managing the Value of CompaniesISBN 978-0-470-42465-0The #1 Best-Selling Guide to Corporate ValuationConsulting experts McKinsey & Company bring us a fully revised and updated Fifth Edition of thistrusted resource for corporate valuation. Updated and Expanded Fifth EditionThis long-awaited Fifth Edition of thebest-selling book on valuation provides newinformation on the strategic advantages ofvalue-based management — now moreimportant than ever amid current changingbusiness conditions. Proven McKinsey Approach to ValuationGives strategies for multi-business valuation,and valuation for corporate restructuring,mergers, and acquisitions using the McKinseydiscounted cash flow approach. New Chapters on Advanced ValuationTechniquesThis Fifth Edition provides all new materialon advanced valuation techniques. Provides Detailed Instruction for Learningand ApplicationValuation, Fifth Edition includes updated anddetailed case studies showing how these vitalvaluation techniques and principles areapplied, and gives instructions on how toapply real options to corporate valuation.

McKinsey Valuation Discounted Cash Flow Model,Fifth EditionDesigned to Help You Measure and Manage the Value of Companies978-0-470-42457-5The Practical Model Designed to Help You Measure and Manage the Value of CompaniesThe Valuation DCF Model, CD-ROM, Fifth Edition is a vital companion to Valuation, Fifth Edition,containing expert guidance and the renowned discounted cash flow valuation model developed by McKinsey’sown finance practice. Model Completes Computations AutomaticallyPromoting error-free analysis, the McKinseyvaluation model is updated and fully revised tomatch the strategies and approach in Valuation,Fifth Edition and University Edition. The modelensures that all important measures, such asreturn on investment capital and free cash flow,are calculated correctly — allowing users to focuson analyzing a company’s performance instead ofworrying about computational errors. Contains Models and Reports for ValuingProjected PerformanceFollows the three-period forecast methodologycomprising five years of detailed forecasts, tenyears of summarized key driver forecasts, and acontinuing value period. Includes Expert GuidanceIncludes detailed instructions and expert guidanceon using the McKinsey DCF Model forevaluating performance and valuing projectedperformance using both the enterprise DCF andeconomic profit approaches described throughoutValuation, Fifth Edition. Value Real Companies in Real-WorldSituationsWith this companion CD-ROM as your guide,you can use the Valuation DCF Model to applythe proven McKinsey Valuation approach for realcompanies and real-world scenarios.Also Available Bundled with Valuation, Fifth Edition!Valuation DCF Model Download, Fifth EditionISBN 978-0-470-42469-8

ValueThe Four Cornerstones of Corporate FinanceISBN 978-0-470-42460-5An Accessible Guide to the Essential Issues of Corporate FinanceValue is the new component to the McKinsey Valuation Suite intended to give an executive view on thefoundations of corporate finance.A Qualitative Approach to Corporate Finance Not bogged down in math equations or heavyanalysis, the book is a much more qualitativeapproach to what the authors consider a lost artInformation Managers Need to Help Them MakeImportant Decisions Day In and Day Out Discusses the four foundational principles ofcorporate finance Effectively applies the theory of value creationto our economy Examines ways to maintain and grow valuethrough mergers, acquisitions, and portfoliomanagement Addresses how to ensure your company has theright governance, performance measurement,and internal discussions to encourage valuecreating decisions

An Excerpt fromMcKinsey Valuation, Fifth Edition

P1: OTA/XYZP2: ABCfmJWBT300/MckinseyJune 10, 201011:1Printer Name: HamiltonContentsAbout the AuthorsPrefacexiAcknowledgmentsPart OneixxvFoundations of Value1 Why Value Value?32 Fundamental Principles of Value Creation3 The Expectations Treadmill434 Return on Invested Capital575 GrowthPart Two1579Core Valuation Techniques6 Frameworks for Valuation1017 Reorganizing the Financial Statements1318 Analyzing Performance and Competitive Position9 Forecasting Performance16318510 Estimating Continuing Value11 Estimating the Cost of Capital21123112 Moving from Enterprise Value to Value per Share13 Calculating and Interpreting Results14 Using Multiples to Triangulate Results267287303v

P1: OTA/XYZP2: ABCfmJWBT300/MckinseyJune 10, 201011:1Printer Name: Hamiltonvi CONTENTSPart Three Intrinsic Value and the Stock Market15 Market Value Tracks Return on Invested Capitaland Growth32516 Markets Value Substance, Not Form34517 Emotions and Mispricing in the Market36918 Investors and Managers in Efficient MarketsPart FourManaging for Value19 Corporate Portfolio Strategy20 Performance Management40141521 Mergers and Acquisitions43122 Creating Value through Divestitures23 Capital Structure45547524 Investor CommunicationsPart Five385511Advanced Valuation Issues25 Taxes52926 Nonoperating Expenses, One-Time Charges, Reserves,and Provisions54327 Leases, Pensions, and Other Obligations28 Capitalized Expenses29 Inflation57758730 Foreign Currency60131 Case Study: HeinekenPart Six559615Special Situations32 Valuing Flexibility65733 Valuation in Emerging Markets68934 Valuing High-Growth Companies35 Valuing Cyclical Companies36 Valuing Banks717731741Appendix A Economic Profit and the Key ValueDriver Formula765Appendix BDiscounted Economic Profit Equals DiscountedFree Cash Flow769

P1: OTA/XYZP2: ABCfmJWBT300/MckinseyJune 10, 201011:1Printer Name: HamiltonCONTENTS viiAppendix C Derivation of Free Cash Flow, WeightedAverage Cost of Capital, and AdjustedPresent Value773Appendix D Levering and Unlevering the Cost of Equity779Appendix E787Index791Leverage and the Price-to-Earnings Multiple

P1: OTA/XYZP2: ABCfmJWBT300/MckinseyJune 10, 201011:1Printer Name: HamiltonPrefaceThe first edition of this book appeared in 1990, and we are encouraged that itcontinues to attract readers around the world. We believe the book appeals toreaders everywhere because the approach it advocates is grounded in universaleconomic principles. While we continue to improve, update, and expand thetext as our experience grows and as business and finance continue to evolve,those universal principles do not change.The 20 years since that first edition have been a remarkable period in business history, and managers and investors continue to face opportunities andchallenges emerging from it. The events of the economic crisis that began in2007, as well as the Internet boom and its fallout almost a decade earlier, havestrengthened our conviction that the core principles of value creation are general economic rules that continue to apply in all market circumstances. Thus,the extraordinarily high anticipated profits represented by stock prices duringthe Internet bubble never materialized, because there was no “new economy.”Similarly, the extraordinarily high profits seen in the financial sector for thetwo years preceding the start of the 2007 financial crisis were overstated,as subsequent losses demonstrated. The laws of competition should havealerted investors that those extraordinary profits couldn’t last and might notbe real.Over the past 20 years, we have also seen confirmed that for some companies, some of the time, the stock market may not be a reliable indicator of value.Knowing that value signals from the stock market may occasionally be unreliable makes us even more certain that managers need at all times to understandthe underlying, intrinsic value of their company and how it can create morevalue. In our view, clear thinking about valuation and skill in using valuationto guide business decisions are prerequisites for company success.xi

P1: OTA/XYZP2: ABCfmJWBT300/MckinseyJune 10, 201011:1Printer Name: Hamiltonxii PREFACEWHY THIS BOOKNot all CEOs, business managers, and financial managers do understand valuein great depth, although they need to understand it fully if they are to dotheir jobs well and fulfill their responsibilities. This book offers them the necessary understanding, its practical intent reflecting its origin as a handbook forMcKinsey consultants. We publish it for the benefit of current and future managers who want their companies to create value, and also for their investors.It aims to demystify the field of valuation and to clarify the linkages betweenstrategy and finance. So while it draws on leading-edge academic thinking, itis primarily a how-to book and one we hope that you will use again and again.This is no coffee-table tome: If we have done our job well, it will soon be fullof underlinings, margin notations, and highlightings.The book’s messages are simple: Companies thrive when they create realeconomic value for their shareholders. Companies create value by investingcapital at rates of return that exceed their cost of capital. And these two truthsapply across time and geography. The book explains why these core principlesof value creation are true and how companies can increase value by applyingthe principles to decisions, and demonstrates practical ways to implement theprinciples in their decision-making.The technical chapters of the book aim to explain step-by-step how to dovaluation well. We spell out valuation frameworks that we use in our consulting work, and we illustrate them with detailed case studies that highlightthe practical judgments involved in developing and using valuations. Just asimportant, the management chapters discuss how to use valuation to makegood decisions about courses of action for a company. Specifically, they willhelp business managers understand how to:r Decide among alternative business strategies by estimating the value ofeach strategic choice.r Develop a corporate portfolio strategy, based on understanding whichbusiness units a corporate parent is best positioned to own, and whichmight perform better under someone else’s ownership.r Assess major transactions, including acquisitions, divestitures, and restructurings.r Improve a company’s performance management systems to align anorganization’s various parts to create value.r Communicate effectively with investors, including both who to talk andlisten to and how.r Design an effective capital structure to support the corporation’s strategyand minimize the risk of financial distress.

P1: OTA/XYZP2: ABCfmJWBT300/MckinseyJune 10, 201011:1Printer Name: HamiltonSTRUCTURE OF THE BOOK xiiiSTRUCTURE OF THE BOOKIn this fifth edition, we continue to expand the practical application of financeto real business problems, reflecting the economic events of the past decade,new developments in academic finance, and the authors’ own experiences. Theedition is organized in six parts, each with a distinct focus.Part One, Foundations of Value, provides an overview of value creation.We make the case that managers should focus on long-term value creationdespite the capital market turmoil of the past several years. We explain thetwo core principles of value creation: first, the idea that return on capital andgrowth drive cash flow, which in turn drives value, and second, the conservation of value principle, that anything that doesn’t increase cash flow doesn’tcreate value (unless it reduces risk). We devote a chapter each to return oninvested capital and to growth, including strategic principles and empiricalinsights.Part Two, Core Valuation Techniques, is a self-contained handbook forusing discounted cash flow (DCF) to value a company. A reader will learnhow to analyze historical performance, forecast free cash flows, estimate theappropriate opportunity cost of capital, identify sources of value, and interpret results. We also show how to use multiples of comparable companies tosupplement DCF valuations.Part Three, Intrinsic Value and the Stock Market, presents the empiricalevidence that share prices reflect the core principles of value creation and arenot influenced by earnings management, accounting results, or institutionaltrading factors such as cross-listings. It also describes the rare circumstancesunder which share prices for individual companies or, very occasionally, themarket in general may temporarily violate the core principles. The final chapterexplains what makes stock markets efficient, which type of investors ultimatelydetermine the trading range of a company’s share price, and the implicationsof their influence for managers.Part Four, Managing for Value, applies the value creation principles topractical decisions that managers face. It explains how to design a portfolio ofbusinesses; how to create value through mergers, acquisitions, and divestitures;how to construct an appropriate capital structure; and how companies canimprove their communications with the financial markets.Part Five, Advanced Valuation Issues, explains how to analyze and incorporate in your valuation such complex issues as taxes, pensions, reserves,inflation, and foreign currency. Part Five also includes a comprehensive casevaluing Heineken N.V., the Dutch brewer, illustrating how to apply both thecore and advanced valuation techniques.Part Six, Special Situations, is devoted to valuation in more complex contexts. We explore the challenges of valuing high-growth companies, companiesin emerging markets, cyclical companies, and banks. In addition, we show how

P1: OTA/XYZP2: ABCfmJWBT300/MckinseyJune 10, 201011:1Printer Name: Hamiltonxiv PREFACEuncertainty and flexibility affect value, and how to apply option pricing theoryand decision trees in valuations.WHAT’S NEW ABOUT THE FIFTH EDITIONMost of the case examples and empirical analyses have been updated, andwe have reflected changes in accounting rules. We have enhanced the globalperspective in the book with extensive examples and data from both the UnitedStates and Europe.To make the book easier to navigate, we have broken up long chaptersfrom the previous edition into several shorter chapters, so that each is a moremanageable size and the reader can find important topics faster. In addition, wehave created a new part on advanced valuation issues, removing these topicsfrom the section dedicated to core techniques. This makes the core techniquessection shorter and easier to read and also allows us more space to devote toadvanced topics.An important addition to the book is the expanded discussion of returnon invested capital (ROIC) and growth in two new chapters in Part One. Thenew ROIC chapter shows the linkages between different levels of ROIC anddifferent business strategies, to help executives assess whether their strategiescan lead to high and sustained returns on capital. In the new growth chapter,we show the different effects on value of different types of growth, to helpcompanies prioritize growth initiatives.Finally, Part Three is an entirely new section that deals with the stockmarket. As in past editions, we show that stock market values generally reflectcompanies’ fundamental economic performance: markets are not fooled byaccounting gimmicks used to embellish results. For the fifth edition, however,we have expanded our discussion of those market inefficiencies that do occurfrom time to time. We also present new insights on how to segment investorsinto different types, how the different types of investors affect the market, andthe implications of this segmentation for executives.VALUATION SPREADSHEETAn Excel spreadsheet valuation model is available on a CD-ROM or via Webdownload. This valuation model is similar to the model we use in practice.Practitioners will find the model easy to use in a variety of situations: mergersand acquisitions, valuing business units for restructuring or value-based management, or testing the implications of major strategic decisions on the value ofyour company. We accept no responsibility for any decisions based on your inputs to the model. If you would like to purchase the model on CD-ROM (ISBN978-0-470-42457-5), please call (800) 225-5945, or visit www.wileyvaluation.com to purchase the model via Web download (ISBN 978-0-470-89455-2).

P1: OTA/XYZP2: ABCc01JWBT300/MckinseyMay 23, 20109:57Printer Name: HamiltonPart OneFoundations of Value

P1: OTA/XYZP2: ABCc01JWBT300/MckinseyMay 23, 20109:57Printer Name: Hamilton1Why Value Value?Value is the defining dimension of measurement in a market economy. Peopleinvest in the expectation that when they sell, the value of each investmentwill have grown by a sufficient amount above its cost to compensate themfor the risk they took. This is true for all types of investments, be they bonds,derivatives, bank accounts, or company shares. Indeed, in a market economy, acompany’s ability to create value for its shareholders and the amount of valueit creates are the chief measures by which it is judged.Value is a particularly helpful measure of performance because it takes intoaccount the long-term interests of all the stakeholders in a company, not justthe shareholders. Alternative measures are neither as long-term nor as broad.For instance, accounting earnings assess only short-term performance fromthe viewpoint of shareholders; measures of employee satisfaction measure justthat. Value, in contrast, is relevant to all stakeholders, because according toa growing body of research, companies that maximize value for their shareholders in the long term also create more employment, treat their current andformer employees better, give their customers more satisfaction, and shoulder a greater burden of corporate responsibility than more shortsighted rivals.Competition among value-focused companies also helps to ensure that capital,human capital, and natural resources are used efficiently across the economy,leading to higher living standards for everyone. For these reasons, knowledgeof how companies create value and how to measure value—the subjects of thisbook—is vital intellectual equipment in a market economy.In response to the economic crisis unfolding since 2007, when the U.S.housing bubble burst, several serious thinkers have argued that our ideasabout market economies must change fundamentally if we are to avoid similarcrises in the future. The changes they propose include more explicit regulationgoverning what companies and investors do, as well as new economic theories.Our view, however, is that neither regulation nor new theory will prevent futurebubbles or crises. The reason is that past ones have occurred largely when3

P1: OTA/XYZP2: ABCc01JWBT300/MckinseyMay 23, 20109:57Printer Name: Hamilton4 WHY VALUE VALUE?companies, investors, and governments have forgotten how investments createvalue, how to measure value properly, or both. The result has been confusionabout which investments are creating real value—confusion that persists untilvalue-destroying investments have triggered a crisis.Accordingly, we believe that relearning how to create and measure valuein the tried-and-true fashion is an essential step toward creating more secureeconomies and defending ourselves against future crises. That is why this fifthedition of Valuation rests on exactly the same core principles as the first.The guiding principle of value creation is that companies create value byinvesting capital they raise from investors to generate future cash flows at ratesof return exceeding the cost of capital (the rate investors require to be paid forthe use of their capital). The faster companies can increase their revenues anddeploy more capital at attractive rates of return, the more value they create. Thecombination of growth and return on invested capital (ROIC) relative to its costis what drives value. Companies can sustain strong growth and high returnson invested capital only if they have a well-defined competitive advantage.This is how competitive advantage, the core concept of business strategy, linksto the guiding principle of value creation.The corollary of this guiding principle, known as the conservation of value,says anything that doesn’t increase cash flows doesn’t create value.1 For example, when a company substitutes debt for equity or issues debt to repurchaseshares, it changes the ownership of claims to its cash flows. However, it doesn’tchange the total available cash flows,2 so in this case value is conserved, notcreated. Similarly, changing accounting techniques will change the appearanceof cash flows without actually changing the cash flows, so it won’t change thevalue of a company.To the core principles, we add the empirical observation that creating sustainable value is a long-term endeavor. Competition tends to erode competitiveadvantages and, with them, returns on invested capital. Therefore, companiesmust continually seek and exploit new sources of competitive advantage ifthey are to create long-term value. To that end, managers must resist shortterm pressure to take actions that create illusory value quickly at the expenseof the real thing in the long term. Creating value for shareholders is not thesame as, for example, meeting the analysts’ consensus earnings forecast forthe next quarter. It means balancing near-term financial performance againstwhat it takes to develop a healthy company that can create value for decadesahead—a demanding challenge.This book explains both the economics of value creation (for instance,how competitive advantage enables some companies to earn higher returnson invested capital than others) and the process of measuring value (for example, how to calculate return on invested capital from a company’s accounting1 Assuming2 Inthere are no changes in the company’s risk profile.Chapter 23 we show that the tax savings from debt may increase the company’s cash flows.

P1: OTA/XYZP2: ABCc01JWBT300/MckinseyMay 23, 20109:57Printer Name: HamiltonCONSEQUENCES OF FORGETTING TO VALUE VALUE 5statements). With this knowledge, companies can make wiser strategic and operating decisions, such as what businesses to own and how to make trade-offsbetween growth and returns on invested capital. Equally, this knowledge willenable investors to calculate the risks and returns of their investments withgreater confidence.CONSEQUENCES OF FORGETTING TO VALUE VALUEThe guiding principle of value creation—the fact that return on invested capitaland growth generate value—and its corollary, the conservation of value, havestood the test of time. Alfred Marshall spoke about the return on capital relativeto the cost of capital in 1890.3 When managers, boards of directors, and investorshave forgotten these simple truths, the consequences have been disastrous. Therise and fall of business conglomerates in the 1970s, hostile takeovers in theUnited States in the 1980s, the collapse of Japan’s bubble economy in the 1990s,the Southeast Asian crisis in 1998, the Internet bubble, and the economic crisisstarting in 2007 can all, to some extent, be traced to a misunderstanding ormisapplication of these principles.Market BubblesDuring the Internet bubble, managers and investors lost sight of what drovereturn on invested capital; indeed, many forgot the importance of this ratioentirely. When Netscape Communications went public in 1995, the companysaw its market capitalization soar to 6 billion on an annual revenue base ofjust 85 million, an astonishing valuation. This phenomenon convinced thefinancial world that the Internet could change the way business was doneand value created in every sector, setting off a race to create Internet-relatedcompanies and take them public. Between 1995 and 2000, more than 4,700companies went public in the United States and Europe, many with billiondollar-plus market capitalizations.Many of the companies born in this era, including Amazon.com, eBay, andYahoo!, have created and are likely to continue creating substantial profits andvalue. But for every solid, innovative new business idea, there were dozens ofcompanies (including Netscape) that turned out to have nothing like the sameability to generate revenue or value in either the short or the long term. Theinitial stock market success of these flimsy companies represented a triumphof hype over experience.Many executives and investors either forgot or threw out fundamentalrules of economics in the rarefied air of the Internet revolution. Considerthe concept of increasing returns to scale, also known as “network effects” or3 A.Marshall, Principles of Economics, vol. 1 (New York: Macmillan, 1890), 142.

P1: OTA/XYZP2: ABCc01JWBT300/MckinseyMay 23, 20109:57Printer Name: Hamilton6 WHY VALUE VALUE?“demand-side economies of scale.” The idea enjoyed great popularity duringthe 1990s after Carl Shapiro and Hal Varian, professors at the University ofCalifornia–Berkeley, described it in a book titled Information Rules: A StrategicGuide to the Network Economy.4The basic idea is this: In certain situations, as companies get bigger, theycan earn higher margins and return on capital because their product becomesmore valuable with each new customer. In most industries, competition forcesreturns back to reasonable levels. But in increasing-returns industries, competition is kept at bay by the low and decreasing unit costs of the market leader(hence the tag “winner takes all” for this kind of industry).Take Microsoft’s Office software, a product that provides word processing,spreadsheets, and graphics. As the installed base of Office users expands, itbecomes ever more attractive for new customers to use Office for these tasks,because they can share their documents, calculations, and images with somany others. Potential customers become increasingly unwilling to purchaseand use competing products. Because of this advantage, Microsoft made profitmargins of more than 60 percent and earned operating profits of approximately 12 billion on Office software in 2009, making it one of the most profitableproducts of all time.As Microsoft’s experience illustrates, the concept of increasing returns toscale is sound economics. What was unsound during the Internet era was itsmisapplication to almost every product and service related to the Internet. Atthat time, the concept was misinterpreted to mean that merely getting big fasterthan your competitors in a given market would result in enormous profits. Toillustrate, some analysts applied the idea to mobile-phone service providers,even though mobile customers can and do easily switch providers, forcing theproviders to compete largely on price. With no sustainable competitive advantage, mobile-phone service providers were unlikely ever to earn the 45 percentreturns on invested capital that were projected for them. Increasing-returnslogic was also applied to Internet grocery delivery services, even though thesefirms had to invest (unsustainably, eventually) in more drivers, trucks, warehouses, and inventory when their customer base grew.The history of innovation shows how difficult it is to earn monopoly-sizedreturns on capital for any length of time except in very special circumstances.That did not matter to commentators who ignored history in their indiscriminate recommendation of Internet stocks. The Internet bubble left a sorry trailof intellectual shortcuts taken to justify absurd prices for technology companyshares. Those who questioned the new economics were branded as peoplewho simply “didn’t get it”—the new-economy equivalents of defenders ofPtolemaic astronomy.4 C. Shapiro and H. Varian, Information Rules: A Strategic Guide to the Network Economy (Boston: HarvardBusiness School Press, 1999).

P1: OTA/XYZP2: ABCc01JWBT300/MckinseyMay 23, 20109:57Printer Name: HamiltonCONSEQUENCES OF FORGETTING TO VALUE VALUE 7When the laws of economics prevailed, as they always do, it was clear thatmany Internet businesses, including online pet food sales and grocery deliverycompanies, did not have the unassailable competitive advantages required toearn even modest returns on invested capital. The Internet has revolutionizedthe economy, as have other innovations, but it did not and could not renderobsolete the rules of economics, competition, and value creation.Financial CrisesBehind the more recent financial and economic

McKinsey Valuation Discounted Cash Flow Model, Fifth Edition Designed to Help You Measure and Manage the Value of Companies 978-0-470-42457-5 Model Completes Computations Automatically Promoting error-free analysis, the McKinsey valuation model is updated and fully revised to match the strategies and approach in Valuation,

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