You found our list of the best corporate finance books.
Corporate finance books are resources that guide readers about an organization’s financial structure. Examples include Narrative and Numbers by Aswath Damodaran and Venture Deals by Brad Feld and Jason Mendelson. The purpose of these books is to help individuals understand how to manage corporate finances and make better decisions for the benefit of an organization. In addition, these resources give readers insights into finance topics like cost management and profit maximization.
This list includes:
- corporate finance textbooks
- fundamentals of corporate finance book
- corporate finance books for beginners
- corporate finance strategy books
Let’s get to it!
List of corporate finance books
Corporate finance management can make or break an organization. Luckily, a wide variety of resources are suitable for beginner and advanced readers. From Financial Intelligence by Karen Berman to Warren Buffett and the Interpretation of Financial Statements by Mary Buffett and David Clark, here is a list of books that provide extensive knowledge about the corporate finance sector.
1. The Innovator’s Solution: Creating and Sustaining Successful Growth by Clayton M. Christensen and Michael E. Raynor
The Innovator’s Solution is a fantastic choice of corporate finance strategy books for managers and business owners. In the resource, Clayton M. Christensen and Michael E. Raynor explore reasons for the failure of industry leaders. The authors argue that company executives focus too much on pleasing the most profitable customers. As a result, businesses fail to capitalize on disruptive technologies. In the book, readers will learn how to become industry disruptors. Christensen and Raynor use tried-and-tested theories and in-depth research to share their insights.
Notable quote: “Innovator’s dilemma: Should we invest to protect the least profitable end of our business, so that we can retain our least loyal, most price-sensitive customers? Or should we invest to strengthen our position in the most profitable tiers of our business, with customers who reward us with premium prices for better products?”
Read The Innovator’s Solution.
2. Narrative and Numbers: The Value of Stories in Business by Aswath Damodaran
As an experienced investor and finance professor, Aswath Damodaran provides noteworthy tips on corporate finance. The author details how businesses can get multibillion-dollar valuations despite minimal profits. Additionally, the resource offers tips businesses can use to capitalize on the power of stories, persuade cautious investors to take risks, and drive corporate value. Narrative and Numbers offers handy lessons via case studies of leading businesses like Amazon and Apple. The book also describes how commodities, countries, and currencies can shape a business story.
Notable quote: “With all of the data and analytical tools at our disposal, you would not expect this, but a substantial proportion of business and investment decisions are still based on the average. I see investors and analysts contending that a stock is cheap because it trades at a PE that is lower than the sector average or that a company has too much debt because its debt ratio is higher than the average for the market.”
Read Narrative and Numbers.
3. Corporate Finance Fundamentals: Big Business Theory for SME, Investor or MBA Application by Saad
Corporate Finance Fundamentals is a fantastic fundamentals of corporate finance book. The author helps investors, SMEs, and even students concisely grasp personal finance. In the book, readers will get handy tips on planning and managing investments, getting better business outcomes, and earning higher profits. Some of the areas that Corporate Finance Fundamentals cover are risk, cash, and project management. The book focuses on both academic theories and practical guides.
Notable quote: “You can do this by investing in another asset that is perfectly correlated, but in opposite direction, so that any loss incurred is offset.”
4. The Little Book of Valuation: How to Value a Company, Pick a Stock and Profit by Aswath Damodaran
The Little Book of Valuation is a handy guide for individuals looking for corporate finance textbooks. The book provides an exhaustive guide to valuation, the heart of business investment decisions. With the help of The Little Book of Valuation, businesspeople can review stock reports and engage personal efforts when picking stocks. Aswath Damodaran covers valuation techniques such as relative, real value, and intrinsic cash flow valuation. The author also includes examples and case studies that will help build readers’ valuation skills. Damodaran shares the teachings in simple language that readers of all levels will understand. The book is excellent for individuals who want to value companies quickly and pinpoint errors in external valuations.
Notable quote: “The right price: Great growth companies can be bad investments at the wrong price. While multiples such as PEG ratios have their limitations, use them (low PEG ratios) to screen for companies that are cheap.”
5. Shoe Dog: A Memoir by the Creator of Nike by Phil Knight
If you are looking for corporate finance books based on one of the most successful brands worldwide, then Shoe Dog is a good bet. Nike founder Phil Knight shares the company’s story, from its start-up era to becoming the most iconic and game-changing brand worldwide. The author shares how the company moved from $8,000 to $30 billion in annual gross sales. Knight shares his business journey’s setbacks, risks, and triumphs in the comprehensive memoir and autobiography.
Notable quote: “Business is no more about making money than the human body is about making blood. Yes you need to make the stuff, but only to serve your higher aims.”
Read Shoe Dog.
6. Venture Deals by Brad Feld and Jason Mendelson
Venture Deals tops the list of corporate finance textbooks for early-stage investors, graduates, and high-growth company entrepreneurs. The authors detail how businesses can raise starting capital and discuss elevator pitching, business plans, and financial models. Venture Deals also includes details on the successes and failures of different start-ups and how new businesses can avoid the mistakes. Other sectors that the book explores are term sheets, convertible debts, venture capital funds, and negotiation tactics.
Notable quote: “There are only a few key things most VCs look at to understand and get excited about a deal: the problem you are solving, the size of the opportunity, the strength of the team, the level of competition or competitive advantage that you have, your plan of attack, and current status.”
Read Venture Deals.
7. Financial Intelligence: A Manager’s Guide to Knowing What the Numbers Really Mean by Karen Berman, Joe Knight, and John Case
Financial Intelligence is a guide for organizational executives who want to increase their knowledge in the financial field. The author recognizes that businesses expect executives to allocate resources with the guidance of financial data. However, most executives cannot interpret the data and would not identify errors or even calculate the return on investments. In the book, the authors teach finance basics with an interesting twist. Readers will learn how to interpret finance documents such as income, expense, and cash flow statements. Financial Intelligence also provides practical strategies to help managers improve business performance. The book takes an entertaining approach to teaching corporate finance and includes stories from real-world organizations. Free from industry jargon, nonfinancial managers will also benefit from handy info that will boost their confidence to take on everyday tasks.
Notable quote: “You can think of operating expenses as the cholesterol in a business. Good cholesterol makes you healthy, while bad cholesterol clogs your arteries. Good operating expenses make your business strong, and bad operating expenses drag down your bottom line and prevent you from taking advantage of business opportunities.”
Read Financial Intelligence.
8. The Essays of Warren Buffett: Lessons for Corporate America by Warren Buffett
The Essays of Warren Buffet tops the list of corporate finance strategy books. The book takes readers through relevant business and investment wisdom from past and present decades. Readers will get vital insights from Warren Buffett, one of the most successful global investors and wealthiest entrepreneurs. The author organizes the resource into sectors such as corporate governance, investing, mergers and acquisitions, and valuation. The book also includes corporate finance sectors like accounting, tax matters, common stock, and alternatives to common stock.
Notable quote: “Ironically, the rhetoric about options frequently describes them as desirable because they put managers and owners in the same financial boat. In reality, the boats are far different. No owner has ever escaped the burden of capital costs, whereas a holder of a fixed-price option bears no capital costs at all.”
9. Valuation: Measuring and Managing the Value of Companies by Tim Koller, Thomas E. Copeland, Marc Goedhart, and David Wessels
If you are seeking a corporate finance book, then Valuation is a good bet. The resource focuses on the current volatile global economy and provides readers with practical advice and insights into corporate finance. The authors offer guidelines for individuals who want to create, measure, and manage the value of businesses. The book uses case studies to illustrate how businesses can apply valuation principles and techniques in real-world situations. Valuation also provides notable changes in stock markets, academic finance, and accounting rules.
Notable quote: “This phenomenon has serious consequences for hierarchical organizations. Executives are just as loss-averse when the bets are small as they are when the gambles are large, even though small gambles do not raise the same issues of survival or ruin that provide a rationale for aversion to large risks. What’s more, small gambles offer opportunities for the risk-reducing effects of aggregation.”
10. What It Takes: Lessons in the Pursuit of Excellence by Stephen A. Schwarzman
What It Takes uses Stephen A. Schwarzman’s life experiences to teach how individuals can create and sustain thriving organizations. The Blackstone cofounder and Schwarzman Scholars founder takes readers through the journey toward achieving excellence and making positive impacts. Business leaders will learn the importance of establishing processes, investment processes, dealmaking, and diversification. The book is a handy resource for entrepreneurs, students, or executives who want to maximize their potential.
Notable quote: “It’s as hard to start and run a small business as it is to start a big one. You will suffer the same toll financially and psychologically as you bludgeon it into existence. It’s hard to raise the money and to find the right people. So if you’re going to dedicate your life to a business, which is the only way it will ever work, you should choose one with the potential to be huge.”
Read What It Takes.
11. Value: The Four Cornerstones of Corporate Finance by McKinsey & Company, Tim Koller, Richard Dobbs, and Bill Huyett
Value is a fantastic selection of corporate finance books for beginners. The authors use in-depth insights from experts and reliable sources to explore corporate finance. Readers will learn about topics such as the value creation process, shareholder value, risk, and cost of capital. The book also outlines the foundational principles of corporate finance. Business executives will also get tips for growing value through acquisitions, mergers, and portfolio management. Other notable areas include business governance, performance measurement, and value-creating decisions.
Notable quote: “In general, advantages that rise from brand and quality on the price side, and scalability on the cost side, tend to have more staying power than those rising from more temporal sources of advantage, like innovation (which tends to be surpassed by newer innovations).”
12. Value Erosion: How Fallacies in Corporate Finance Are Responsible For Destruction of Shareholder Wealth by Rajesh D. Mudholkar
Rather than experiencing business failure due to flawed financial models, business executives can learn vital lessons by reading Value Erosion. In the resource, Rajesh D. Mudholkar provides insights on destructive project investment decisions. The author bases his lessons on financial crisis cases, including the Asian, Eurozone, and US subprime crises. Readers will also discover past financial models in public organizations. The book is a fantastic pick for equity investors, strategic decision-makers, finance professionals, and business owners.
Notable quote: “Accumulating more of what is already known, or about more things constructed upon the former, has limited benefits to human kind, akin to expanding the size of a data warehouse. Real uplift of human race can only happen when better understanding of the natural phenomena and of the human mind is achieved through applied thought.”
Read Value Erosion.
13. Other People’s Money: The Real Business of Finance by John Kay
Other People’s Money is a top choice of corporate finance books for beginners. With his vast experience in the finance field, John Kay takes readers through his practical and academic experience in the finance sector. Readers will learn the importance of financial institutions and how they can make or break businesses. Kay also explores why the finance sector devotes little time to the search for new investment opportunities. Instead, the sector focuses on the secondary market dealing of existing markets. The author also believes in effective asset managers and good banks for the success of entities.
Notable quote: “RoE is a seriously misleading measure of profitability. For businesses that are not very capital-intensive—such as asset management, or other professional service firms such as accountants—high returns on equity are achievable because the capital requirement is so small. Capital-intensive businesses—in the modern economy they are principally banks, utilities and resource companies—can achieve high returns on equity only through extreme leverage, as Deutsche Bank did.”
Read Other People’s Money.
14. Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage by Mary Buffett & David Clark
Readers who want to gain fundamental knowledge on investing and finance cannot go wrong with Warren Buffett and the Interpretation of Financial Statements. The book covers Warren Buffett’s guidelines for interpreting and analyzing financial data such as income statements, balance sheets, and cash flow statements. Other areas that the authors discuss are the effects of debt on the success of a business and how individuals can use financial statements to value businesses. Readers will also learn why and how high development and research costs can kill a thriving business.
Notable quote: “You have to understand accounting and you have to understand the nuances of accounting. It’s the language of business and it’s an imperfect language, but unless you are willing to put in the effort to learn accounting… you really shouldn’t select stocks yourself.”
As a subset of finance, corporate finance deals with the utilization and management of capital in a business entity. Corporate finance books can help individuals make better financial decisions, manage risks, and help in the overall management of a business. Founders can also get capital raising and business diversification tips. Reading corporate finance books is an excellent idea for individuals who want to grasp large volumes of information in a short period.