On March 20^th,  Mr. Timothy Koller and Mr. Marc Goedhartt gave a presentation at the Tsinghua School of Economics and Management.  Besides working at McKinsey & Company, the two are also the authors of Valuation, which is used by business schools around the world, as well as Tsinghua’s International MBA Corporate Finance course.

The theme of the lecture concentrated on the theme of valuating enterprises.  In particular, the two gave their views on how a firm's valuation can either be affected by (1) growth or by (2) return on invested capital (ROIC).  Their main conclusion, which is also in their book, is that growth and ROIC impact valuations in different amounts and are highly dependent on each other.

Following the lecture, Mr. Koller and Mr. Goedhart generously spent more than an hour on the question and answer period.  Some of the questions included why private equity valuations can sometimes differ from the discounted cash flow method and their thoughts on why there is a difference in valuation for Chinese companies listed both on the Hong Kong stock exchange and the Shanghai stock exchange.