McKinsey's book on Valuation (Measuring and Managing the Value of Companies) - any other similarly good reads?
Hi guys,
Just reading McKinsey's book on valuation - Measuring and Managing the Value of Companies. I thoroughly recommend it to any student, intern and even junior analyst in finance. An amazing book which completely upgraded the way I look at companies, industries and share prices - a #1 in the domain of valuation.
Now with that in mind, was really wondering if you guys have any good reads of similar quality that helps one understand how the economy/markets/companies work.
Thanks for your suggestions!
Investment Valuation by Damodaran Investment Banking by Rosenbaum Best Practrices of Equity Research by Valentine Trading & Exchanges by Harris Applied Mergers & Acquisitions by Bruner
+1 for Rosenbaum. Does the best job of putting everything into practical terms. I also recommend Benjamin Graham's Intelligent Investor; it's the premiere book on value investing.
Inside the Black Box: A Simple Guide to Quantitative and High Frequency Trading Managers and the Legal Environment: Strategies for the 21st Century Venture Capital, Private Equity, and the Financing of Entrepreneurship by Lerner Due Diligence: An M&A Value Creation Approach CFA Books and associated books/content CAIA Books CIPM Books Accounting for Value by Penman Accounting for M&A, Credit Analyis, and Research corporate finance by Brealey Investment by Bodie Valuing a Business by Pratt WSJ
Hello mate, I know it's been a while since your first post, but I also started reading this book recently and have come up with a question which I don't know if it ever occurred to you: in Chapter 9 of the 6th Edition, Reorganizing the financial statements, the authors were able to strip out UPS's amortization of capitalized software from the total reported amortization of intangibles the company reported (Exhibits 9.9, pg186). Do you know how it was achieved? The book never mentioned that and I've been scratching my head for days and still couldn't really figure it out.
Many thanks in advance!
I remember reading something about software amortization. I could be wrong, is it because although softwares are intangibles, they continually add value to the firm, and you cannot really amortize a software as long as it's still in use ?
If you're wondering how they determined what the amortization related to comp software is, you would have to look at the financial statements note disclosures. If you go to the Intangibles note, it should give you the Net Book Value of comp software from prior year to this year. The change in that is the amortization incurred during the year. However, there can also be additions/disposals in that amount which they may indicate in the disclosure, or refer to the cashflow statement under financing activities for intangible asset purchases.
As to why they would add back amortization, maybe theyre trying to calculate EBITDA. However, I believe the issue as to whether or not amortization/depreciation should be 'stripped out' is something that has been debated in the past (Warren Buffet has expressed his opinion on this).
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