McKinsey Market Capitalization

McKinsey is a private firm owned by 2700 partners, so it does not have a market cap, and you cannot check its true worth in the open market. However, I did some calculations and estimated the average McKinsey market capitalization of the firm to be around 19 to 20.72 billion. 

McKinsey & Company (as you may know, is a leading management consulting firm) provides advice to top companies and governments. But how much is McKinsey really worth in the open market? How does it compare to the other two firms in the MBB?

But that’s not all…McKinsey has recorded over 15 billion in revenue this year (with a growth rate of 20%), which clearly shows its worth in the industry. 

In this article, I’ll reveal:

• What is the McKinsey market cap?
• What is McKinsey’s revenue?
• McKinsey’s revenue compared to Bain and BCG

McKinsey Market Cap

Market cap is the measure of a company’s value. It is figured out by multiplying the total number of outstanding shares by the existing market price of a single share. (Source)

This measure is usually used for publicly traded companies (whose share prices are readily available) and changes based on the market condition.

McKinsey, however, is a private company run by over 2,700 partners. This means its shares are not available for purchase by the general public on open markets, like: 

• New York Stock Exchange
• NASDAQ
• London Stock Exchange

Therefore, McKinsey does not have a publicly quoted share price! This makes it impossible to calculate its market cap in a traditional sense. 

But wait…I found a method to estimate the market cap of McKinsey! 

Let me share it with you:

Market Cap of McKinsey: (P/E multiple) x (Estimated profit margin) x (number of partners) x (revenue per partner) 

(Source)

Now, here are the details that I have:

• P/E multiple: Range from 2.5 to 4 for service-focused companies, like McKinsey (I’ll use the midpoint, which is 3.25)
• Profit Margin: At least 35% to 50% (I will take the average: 42.5%)
• Number of partners: 2,700 

The revenue per partner is 5,555,555.6 million. 

Now, let’s calculate the estimated market cap step-by-step:

Market Cap of McKinsey: 3.25 x 0.425 x 2,700 x 5,555,555.6

McKinsey Market Cap: 3.25 x 0.425 x 15,000,000,120

Estimated Market Cap of McKinsey: 20,718,750,165.75

So, as per my calculations – McKinsey has an estimated average market cap of 19 to 20.72 billion. 

McKinsey Revenue 

While McKinsey does not have a market cap, its value is usually determined by annual global revenue!

I discovered that this year, the firm has reported a revenue of over 15 billion. It has shown a growth rate of around 20% from last year ($12.5 billion)!

The table below will show you the firm’s revenue from 2012 to 2022:

(Source)

That’s some impressive growth – isn’t it?

Over the years, McKinsey has had a steady growth in revenue (it is definitely a major player in the consulting industry)!

Not only that, but you’ll be surprised to know that the firm has a huge revenue-per-employee ratio – about 394,736.84!

McKinsey Revenue Compared To Bain and BCG

Just like McKinsey, Bain and BCG are partnership-based firms. They do not have any shares in the market (which means they have no market cap). 

As these firms are known as MBB, you might have a question in mind – how do they compare to each other in terms of value in the market?

To help you with this, I’ll compare their revenues to see the worth of McKinsey in the management consultant industry!

1. BCG

BCG (like McKinsey) is one of the major players in the management consulting industry. It was founded in 1983 and now has over 30,000 employees. 

I came to know that BCG partners with leading businesses to handle their most challenging problems. 

The firm is strongly growing in the industry and recorded a revenue of  $11.7 billion last year (11% growth)!

Christoph Schweizer, BCG CEO, said on their website, “As for 2023, macroeconomic uncertainty dominates most of the conversations I’ve been having with CEOs. Cost management will continue to be critical over the next few years. But so will capability building, scenario planning, scaling up digital and artificial intelligence, and addressing climate and sustainability. We are helping companies around the world to act and make decisions with imperfect information.”

There’s more – BCG revenue has reached 12 billion recently. This places it in the same boat as McKinsey! (Source)

Here’s the BCG revenue per employee ratio:

Revenue: 12 Billion

Total Employee: 30,000

Ratio: Revenue / Total Employees

Ratio: 12,000,000,000 / 30,000

Revenue per Employee Ratio: $40,000 per employee

2. Bain

Bain is the third management consulting firm in the elite MBB group!

It is all about problem-solving and helping businesses to grow. But when it comes to the financial side, how does Bain stand up against McKinsey?

I won’t keep you in suspense – last year, Bain’s revenue was 6 billion! It increased by about 1.9 Billion from the year before. (Source)

Let’s calculate what’s its revenue per employee ratio:

Revenue: 6 Billion

Total Employee: 13,000

Revenue per employee ratio: Revenue / Total Employees

Revenue per employee ratio: 6,000,000,000 / 13,000

Ratio:  $461,538 per employee

That’s a huge amount, right?

But still…Bain is far behind McKinsey in terms of revenue (about 9 Billion)! 

Summing Up!

In this article, I discussed with you the definition of the market cap and showed you why McKinsey does not have one (because it’s not a public firm). I then provided an estimated market value of McKinsey, which is 19 to 20.72 billion, using some calculations. 

I didn’t just stop there – I shared McKinsey’s annual revenue and compared it with the rest of MBB firms to give you more insights into its true worth.

I hope you now have a clear idea of McKinsey’s position and value in the management consulting industry.