Valuation: Measuring 🆓

: A company creates real economic value only when its ROIC exceeds its weighted average cost of capital (WACC).

The core of any successful business strategy is a deep understanding of what truly creates value. According to the seminal guide, Valuation: Measuring and Managing the Value of Companies by McKinsey & Company , value creation is driven by two fundamental factors: growth and Return on Invested Capital (ROIC) relative to the cost of capital . The Fundamental Principles of Value Valuation: Measuring

To determine a company's worth, practitioners typically use several distinct lenses: A Primer On Valuation - Steady Compounding : A company creates real economic value only