The first edition of this book was published in  1990, yet it continues to attract readers around the world. We believe that the book has succeeded because it is grounded in universal econoruic principles. While we continue to iruprove and update the text as our experience grows, the fundaruental principles do not change. They are valid across tirue and geography.Our message is simple: Corupanies thrive when they create real economic value for their shareholders. Corupanies create value by investing capital at rates of return that exceed their cost of capital. This applies equally to U.S., European, and Asian companies. It applies equally to mature ruanufacturing corupanies and high-growth Internet corupanies. Only the irupleruentation details are
different.When corupanies forget these simple truths, consequences are evident: hostile takeovers in the United States in the  1980s, the collapse of the bubble econoruy in Japan in the  1990s, the broad Southeast Asian crisis in 1998, and the persistent slow growth and high uneruployruent in Europe.While the underlying drivers of these events can be traced to a number of factors-ruost often inappropriate govermuent policies or structural deficiencies-the lack of focus on value creation by ruanagers is a key link in the chain leading to econoruic rualaise or crisis.We wrote this book for ruanagers (and future ruanagers) who want their corupanies to create value. It is a how-to book. We hope that it is a book that you will use again and again. If we have done our job well, it will soon be transfonued with underlining, ruargin notations, and highlighting. This is no coffee-table book.