Valuation: Measuring And Managing The Value Of Companies by McKinsey & Company Inc.
Perhaps the most academic title we have reviewed so far in our 52 Books To Read series, McKinsey’s Valuation is a must-have resource to learn about fundamental analysis. The book has been updated regularly since it was first published, with expanded material being added to cover more contemporary themes (like the Internet bubble). As a result, the book still holds its own 26 years after it was originally published. The length of the book is inevitable given how much it covers, but it is surprisingly clear and easy to read given the topic.
We believe fundamental analysis is a crucial part of investing, as described in an eBook we have written previously; you can also learn more about how Cadence combines fundamental and technical analysis here.
Valuation covers topics that every investor should understand, such as how to value cashflows and , how to measure the performance of a company. The lessons in assessing historical performance and forecasting of financial results are extremely valuable.
If you’re interested in learning about different valuation techniques, as well as understanding the framework in which value is measured, then we highly recommend this book.