Narrative and Numbers: The Value of Stories in Business

How can a company that has never turned a profit have a multibillion dollar valuation? Why do some start-ups attract large investments while others do not? Aswath Damodaran, finance professor and experienced investor, argues that the power of story drives corporate value, adding substance to numbers and persuading even cautious investors to take risks. In business, there are the storytellers who spin compelling narratives and the number-crunchers who construct meaningful models and accounts. Both are essential to success, but only by combining the two, Damodaran argues, can a business deliver and sustain value.

Through a range of case studies, Narrative and Numbers describes how storytellers can better incorporate and narrate numbers and how number-crunchers can calculate more imaginative models that withstand scrutiny. Damodaran considers Uber's debut and how narrative is key to understanding different valuations. He investigates why Twitter and Facebook were valued in the billions of dollars at their public offerings, and why one (Twitter) has stagnated while the other (Facebook) has grown. Damodaran also looks at more established business models such as Apple and Amazon to demonstrate how a company's history can both enrich and constrain its narrative. And through Vale, a global Brazil-based mining company, he shows the influence of external narrative, and how country, commodity, and currency can shape a company's story. Narrative and Numbers reveals the benefits, challenges, and pitfalls of weaving narratives around numbers and how one can best test a story's plausibility.

ISBN-13: 9780231180481

Media Type: Hardcover

Publisher: Columbia University Press

Publication Date: 01-10-2017

Pages: 296

Product Dimensions: 6.20(w) x 9.00(h) x 1.10(d)

Age Range: 18 Years

Series: Columbia Business School Publishing

Aswath Damodaran is the Kerschner Family Chair in Finance Education and professor of finance at New York University's Stern School of Business. He is the author of Applied Corporate Finance, Fourth Edition (2014), Investment Valuation: Tools and Techniques for Determining the Value of Any Asset, Third Edition (2012), The Little Book of Valuation: How to Value a Company, Pick a Stock and Profit (2011), and Damodaran on Valuation: Security Analysis for Investment and Corporate Finance, Second Edition (2006).

Table of Contents

Preface
1. A Tale of Two Tribes
2. Tell Me a Story
3. The Elements of Storytelling
4. The Power of Numbers
5. Number-Crunching Tools
6. Building a Narrative
7. Test-Driving a Narrative
8. From Narratives to Numbers
9. Numbers to Value
10. Improving and Modifying Your Narrative—the Feedback Loop
11. Narrative Alterations—the Real World Intrudes
12. News and Narratives
13. Go Big—the Macro Story
14. The Corporate Life Cycle
15. The Managerial Challenge
16. The Endgame
Notes
Index Show More