Growth
Value Drivers
Understanding what creates value and how it is created is critically important. A good format to grasp this is through a value creation tree diagram: First, let’s start […]
Archive
Category: Valuation, Measuring and Managing the Value of Companies – by McK.&Co, T. Koller, M. Goedhart, D. Wessels
Mergers & Acquisitions
Best Owner Thesis
“When a management team with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.” […]
Cross-Border Valuation
Currency Translation
Sometimes, the financial statements of a subsidiary are translated into the parent company’s currency before being presented, which complicates the evaluation of the subsidiary. In such cases, it’s […]
Cross-Border Valuation
Inflation Influence on Value
High inflation erodes the value of an organization because passing inflationary pressure onto customers is challenging and often not initiated – managers often do not realize the impact […]
Cross-Border Valuation
Cross-Border Forecasts
Subsidiary companies operating in another country use the local currency. Therefore, their evaluation requires special considerations. In this entry, I will discuss forecasting cash flows for a subsidiary […]
Other Valuation Methods
Capital Light Business & ROIC
Some business models inherently involve very small amounts of capital, making the use of ROIC (Return on Invested Capital) impractical for evaluation. When the scale of profit relative […]
Statement Reorganizations
Pensions & WACC
To assess an organization’s value, we need to accurately measure the beta. Since the beta statistic for an individual organization is not reliable, we perform an industry beta […]