Introduction
Embark on a journey into the realm of Best Corporate Finance Books with these essential reads. Corporate finance, a pivotal facet of business, encompasses investment decisions, financial strategies, and risk management. Richard A. Brealey, Stewart C. Myers, and Franklin Allen’s “Principles of Corporate Finance” serve as a foundational guide. At the same time, McKinsey & Company Inc. and Tim Koller’s “Valuation” delves into measuring and managing a company’s worth. Paul Pignataro’s “Financial Modeling and Valuation” offers practical insights for aspiring finance professionals. Benjamin Graham’s timeless classic, “The Intelligent Investor,” provides enduring wisdom. Aswath Damodaran’s “Applied Corporate Finance” bridges theory and application, making it an indispensable resource for navigating the intricacies of corporate finance.
20 Best Corporate Finance Books
Certainly! Here’s a list of 20 highly regarded corporate finance books that cover a range of topics within the field:
Principles of Corporate Finance
Written By- Richard A. Brealey, Stewart C. Myers, and Franklin Allen
Rating In Amazon- 4.4/5 (156 Ratings)
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Review In Amazon- This book covers all the basics with lots of real-world examples. The latest edition has some contemporary interesting case studies. Highly recommended for anyone trying to master finance.
PS: This is a beginner-level book, hence it covers a lot of topics but doesn’t go very deep.
Principles of Corporate Finance
Written By- Stephen A. Ross, Randolph W. Westerfield, and Jeffrey Jaffe
Rating In Amazon- 4.4/5 (39 Ratings)
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Review In Amazon- The book emphasizes the modern fundamentals of finance theory. · Authors focus on a small number of integrated and powerful intuitions to explain corporate finance.
Valuation: Measuring and Managing the Value of Companies
Written By- McKinsey & Company Inc. and Tim Koller
Rating In Amazon- 4.7/5 ( 482 Ratings)
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Review In Amazon- Excellent book to study valuations. Every concept is explained with lots of examples. Along with the workbook, it’s a great combination. However, it’s too costly in India. Bring an Indian Edition to reduce its cost.
It is expensive but a good and tough read, Go for it, if you can afford it and can understand the technical equation in finance.
Investment Banking: Valuation, Leveraged Buyouts, and Mergers and Acquisitions
Written By- Joshua Rosenbaum and Joshua Pearl
Rating In Amazon- 4.2/5 (11 Ratings)
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Review In Amazon- This is a solid reference book for experienced i-bankers and those interested in learning more about this industry. I highly recommend it.
That said, the book does not get into the valuation issues involving closely held businesses (lower middle market or your “mom-n-pop” small businesses), such as cost of equity, DLOM, Control Premiums, minority interests valuation, or tax-affecting. There is a lot going on in that area (valuation of closely held businesses) which the book does not address or intend to address.
The Intelligent Investor
Written By- Benjamin Graham
Rating In Amazon- 4.5/5 (38,891 Ratings)
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Review In Amazon- This book is perhaps the most important and insightful book on investing and an eternal classic. It is not a book that promises ‘How to become rich’ or ‘Mastering Stock market in a week’ or ‘Beating the market made easy’ or any shortcut to a quick buck.
Short-term investing is like saying one is a spendthrift miser. While long-term investors buy stocks or bonds for its intrinsic value and hold them, the ‘short-termers’ play on its price like a video game, high on dopamine, ‘seeing price patterns’. While the intrinsic value of the security is stable, the markets, built upon the greed and fear of speculators, fluctuate widely and it is this constant flow of price movements that is the juice of speculation.
Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports
Written By- Howard M. Schilit
Rating In Amazon- 4.6/5 (529 Ratings)
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Review In Amazon- Must read for any investing professional and individual who is planning to invest in quality companies. This book will guide you to analyze quality companies based on the financial records and cleanliness. Avoid any likely fraud companies and identify companies not following ethical practices.
Financial Modeling and Valuation: A Practical Guide to Investment Banking and Private Equity
Written By- Paul Pignataro
Rating In Amazon- 4.3/5 (17 Ratings)
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Review In Amazon- Excellent in terms of giving you an intro to what it means to model a balance sheet. However, I don’t know if it is appropriate to take a company like Amazon as an example (ed.2), since making blind hires when there are so many business models does not seem to be the case. It would have been more useful to take a smaller company with fewer product lines in order to have a clearer prerequisite for the evaluation and to have in-depth knowledge of the industry (i.e. oil E&P, retail clothing, cars, etc.).
Applied Corporate Finance
Written By- Aswath Damodaran
Rating In Amazon- 4.5/5 (82 Ratings)
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Review In Amazon- Excellent work. Aswath is the best professor of corporate finance and valuation today. This particular issue is absurdly expensive. It’s expensive even for Americans. I was only able to buy it because it was used, fortunately, one used in good condition.
Corporate Finance For Dummies
Written By- Michael Taillard
Rating In Amazon- 4.4/5 (480 Ratings)
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Review In Amazon- I got this book to understand finance basics so I could pass my CIA exam. I passed (yay!) and have a much better understanding of Finance than I used to. I have the book in my cube at work and refer to it quite often. There are a few pages with just ratios on them and it helped me “see” what the ratios were. For example, I was able to “see” that all the TO ratios had “average x” on the bottom and either sales/cogs/purchases on top and I was like OHHHH DUHHHHHHHH. This book was really helpful. Definitely get it if you’re looking to get an overall understanding of Finance.
Mergers, Acquisitions, and Other Restructuring Activities
Written By- Donald DePamphilis
Rating In Amazon- 4.4/5 (57 Ratings)
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Review In Amazon- I would recommend any grad student or individual who wants to have a career in investment banking or merger-related business activities to read this book. The content is very detailed and the mathematics and case studies/example problems provide a very thorough deeper understanding of the material. The author is obviously very well educated in this area. I highly recommend from a finance grad student.
Security Analysis
Written By- Benjamin Graham and David Dodd
Rating In Amazon- 4.6/5 (1,031 Ratings)
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Review In Amazon- Very well written with some really good insights from new-age investors. If one is a student of the stock market then this book is a must-read for all practical purposes. One difficulty with this book though is that most of the investing world today doesn’t agree with all the philosophies of Graham and Dodd Especially with fast-growing companies. Many such companies wouldn’t have been part of Graham’s pick had he been alive in this era. Hence, One must be wise to understand the necessity for identifying good companies to invest.
The Art of M&A: A Merger Acquisition Buyout Guide
Written By- Stanley Foster Reed, Alexandra Lajoux, and H. Peter Nesvold
Rating In Amazon- 4.5/5 (91 Ratings)
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Review In Amazon- This is a nice introductory book on M&A. The discussion, in my opinion, is fairly shallow. Understandably, high-level generalizations are expected for a book like this, but that may be the target market. The book has this Q&A format, which may work for some people and not for others. Apart from getting a general understanding of various aspects of the M&A process, one may be able to pick up some buzzwords to help carry a light conversation on M&A. In that respect, I think this is a pretty good book. But if you are looking for details, I believe you are better off choosing a more specialized expert writing on that specific topic.
Financial Management: Principles and Applications
Written By- Sheridan Titman and Arthur J. Keown
Rating In Amazon- 4.0/5 (28 Ratings)
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Review In Amazon- The first thing I noticed when I received this book was the notice on the cover stating this edition was not to be distributed outside the Indian continent. I’m not sure what alterations were made to the text for that geographic region or if shipping this version to the US violates copyright laws. Something for others to keep in mind when purchasing. Otherwise the book arrived quickly and in good condition.
Investment Valuation: Tools and Techniques for Determining the Value of Any Asset
Written By- Aswath Damodaran
Rating In Amazon- 4.5/5 (296 Ratings)
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Review In Amazon- I started my journey with this book last year. The first thing I realized is that I need to brush up on my corporate finance knowledge a little bit before I can do justice to this book. So I studied corporate finance BMA and took a short course as well. After the course, I restarted this book, and wow!!! This is possibly the only and the best and most comprehensive textbook on the subject of valuation. The best part is Professor Aswath Damodaran’s openness and mission to teach this subject. So you will find so much supporting material that will help you immensely. You can find videos, hundreds of Excel sheets, solutions and so much more
Financial Intelligence for Entrepreneurs: What You Really Need to Know About the Numbers
Written By- Karen Berman and Joe Knight
Rating In Amazon- 4.7/5 (333 Ratings)
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Review In Amazon- We often take financial principles for granted, and assume that everyone working in an organization would be well aware of these. However, it really often is not the case. This book lays out the fundamental principles of reading financial statements and understanding the basics. The message of the book is clear: finance isn’t a science, but an art, and knowing every assumption behind the numbers will make you realize what is actually going on
Capital Budgeting: Theory and Practice
Written By- Pamela P. Peterson and Frank J. Fabozzi
Rating In Amazon- 4.4/5 (12 Ratings)
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Review In Amazon- I love this book because it is written in simple and straightforward language that makes it for a reader’s understanding. Although it came rather too late for my capital budgeting course, it is worth having. In fact, I struggled with a textbook that was hard to understand but that was the recommended book for the course. So after completing the course I decided to have a book as a reference and came across it and purchased it. I am having my money’s worth.
Corporate Finance: A Practical Approach
Written By- Michelle R. Clayman, Martin S. Fridson, George H. Troughton, and Matthew Scanlan
Rating In Amazon- 4.0/5 (29 Ratings)
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Review In Amazon- This detailed text expounds on the concepts and theories that the practice of which are important to investors and other corporate business-minded people. The degree of information related requires background knowledge and some experience with advanced terminology. I highly recommend this book for those well versed in business and who are looking for the extra edge information can provide. I chose this text as a capstone to my personal learning prior to going for my master’s degree. I was impressed and would not have chosen a different work.
The Little Book of Valuation: How to Value a Company, Pick a Stock, and Profit
Written By- Aswath Damodaran
Rating In Amazon- 4.3/5 (1,318 Ratings)
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Review In Amazon- Although the book conveys the details in the most lucid manner, the reader has to be familiar with the basics of corporate finance. In fact, this is the most easy-to-read finance guidebook that I have ever come across.
This revises the concepts of corporate finance and conveys everything that you need to know about valuation in the most brief possible manner without compromising on the details and caveats of finance.
Financial Management and Analysis
Written By- Frank J. Fabozzi and Pamela P. Peterson
Rating In Amazon- 5/5 (2 Ratings)
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Review In Amazon- If you are looking for a book that provides an excellent understanding of finance and the financial market then you do not want this book. this is a very basic book on finance.
Financial Strategy for Public Managers
Written By- by Sharon M. Oster
Rating In Amazon- 5/5 (10 Ratings)
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Review In Amazon- No review
These Books offer a diverse range of insights into corporate finance, from fundamental principles to advanced valuation techniques and real-world applications.
Bottomline:-
These gifted works take you on a deep dive into the realms of corporate finance, exploring financial strategy and investment planning as well as estimating company value. From classics like “Principles of Corporate Finance” by Brealey, Myers, and Allen to modern insights found in “Valuation: The books Measurement and Management of the Value of Companies by McKinsey & Co. Berman and Knight’s Financial Intelligence for Entrepreneurs provides non-financial managers with important financial know-how. Finding your way around corporate finance Whether you are a financial professional or new to the scene, these Best Corporate Finance Books impart valuable knowledge. Develop financial discernment, decision-making ability, and a deeper insight into the principles of corporate finance.
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