Market Value Added (MVA)
Market value added (MVA) is the difference between a firm fair value and its invested capital. MVA is a measure of the value a company has created in excess of the resources already committed to the enterprise.
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- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value (EV)
- Enterprise Value to FCFF (EV/FCFF)
- Net Profit Margin since 2008
- Debt to Equity since 2008
- Price to Earnings (P/E) since 2008
- Price to Operating Profit (P/OP) since 2008
- Price to Sales (P/S) since 2008
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MVA
Activision Blizzard Inc., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of Activision Blizzard
- The market value exhibited a marked upward trend from 2018 to 2020, increasing from 34,931 million USD to a peak of 78,729 million USD. However, this was followed by a decline in the subsequent years, with the market value falling to 67,175 million USD in 2021 and further down to 58,576 million USD in 2022. This indicates a period of strong market appreciation followed by a pronounced reduction in valuation.
- Invested capital
- Invested capital showed consistent growth from 2018 through 2021, rising from 16,084 million USD to 22,243 million USD. In 2022, there was a slight contraction to 19,837 million USD. The general trend suggests investment expansion over the majority of the period, with a marginal decrease in the most recent year.
- Market value added (MVA)
- Market value added increased substantially from 18,847 million USD in 2018 to a high of 58,397 million USD in 2020, reflecting strong value creation over these years. Following this peak, MVA decreased significantly to 44,932 million USD in 2021 and further to 38,739 million USD in 2022, mirroring the downward trend observed in market value and indicating a reduction in the premium investors place over invested capital.
- Overall insights
- The data highlights a cyclical pattern wherein the company experienced significant valuation growth and value creation through 2020, alongside increasing invested capital. The subsequent decline in both market value and MVA from 2021 to 2022 suggests challenges in maintaining growth momentum or shifts in market sentiment. The reduction in invested capital in the last reported year might reflect strategic adjustments in capital allocation in response to changing market conditions.
MVA Spread Ratio
Activision Blizzard Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2022 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
Over the analyzed period, there is a noticeable fluctuation in key financial metrics. The market value added (MVA) increased significantly from 18,847 million US dollars at the end of 2018 to a peak of 58,397 million US dollars in 2020, reflecting considerable growth in market valuation. However, after 2020, MVA declined to 44,932 million US dollars in 2021 and further decreased to 38,739 million US dollars by the end of 2022.
Invested capital shows a more gradual upward trend from 16,084 million US dollars in 2018, reaching 22,243 million US dollars in 2021. This figure then declined to 19,837 million US dollars in 2022, indicating a reduction in the capital deployed within the most recent period compared to the previous year.
The MVA spread ratio, representing the relative spread between market value and invested capital, experienced substantial growth from 117.18% in 2018 to a high of 287.22% in 2020. This ratio subsequently dropped to 202% in 2021 and to 195.29% in 2022. Despite the decline, the ratio remained significantly above 100%, suggesting that the market value consistently exceeded invested capital by a substantial margin throughout the period.
- Market Value Added (MVA)
- Strong growth until 2020, followed by a marked decrease over the next two years.
- Invested Capital
- Gradual increase from 2018 to 2021, then a dip in 2022.
- MVA Spread Ratio
- Significant increase peaking in 2020, with a subsequent decline but still indicative of considerable market value premium over invested capital.
Overall, the data illustrates a period of robust market valuation growth culminating in 2020, after which there was a contraction in both market value added and capital invested. The elevated MVA spread ratio throughout suggests that market perceptions of value creation remained positive despite the recent downtrend.
MVA Margin
Activision Blizzard Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Net revenues | ||||||
| Add: Increase (decrease) in deferred revenues | ||||||
| Adjusted net revenues | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 MVA. See details »
2 2022 Calculation
MVA margin = 100 × MVA ÷ Adjusted net revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial data exhibits several notable trends over the five-year period from 2018 to 2022. There is a clear pattern of fluctuation in the market value added (MVA), adjusted net revenues, and MVA margin, indicating shifts in market valuation relative to the company’s revenue base.
- Market Value Added (MVA)
- The MVA shows an overall upward trend from 18,847 million US dollars in 2018 to a peak of 58,397 million in 2020. This is followed by a decline in subsequent years, dropping to 44,932 million in 2021 and further down to 38,739 million in 2022. The initial sharp increase suggests significant growth in market valuation during the earlier years, while the later decline indicates some contraction or market revaluation.
- Adjusted Net Revenues
- Adjusted net revenues demonstrate a less volatile trajectory, starting at 7,064 million US dollars in 2018, dipping to 6,371 million in 2019, and then increasing steadily to 8,400 million in 2020. This upward trend continues modestly in the following years, reaching 8,232 million in 2021 and 8,498 million in 2022. The revenue recovery and growth from 2019 onwards suggest an improving operational performance or expanded sales.
- MVA Margin
- The MVA margin, which represents the ratio of market value added to net revenues, aligns with the fluctuations observed in MVA. It rises sharply from 266.8% in 2018 to a high of 695.2% in 2020. Thereafter, it decreases to 545.82% in 2021 and continues to fall to 455.86% in 2022. Despite the decline after 2020, the MVA margin remains substantially elevated compared to 2018, indicating that the market’s valuation premium relative to revenue stayed significantly higher than in the initial year observed.
In summary, the data highlights a period of strong market value growth culminating in 2020, followed by a reversal trend despite continued growth in revenues. The sustained high MVA margin suggests that the company's market valuation retained a considerable premium over its adjusted net revenues throughout the period, although the margin contracted noticeably after peaking in 2020. This could imply increased market optimism up to 2020, followed by a period of reassessment or external market pressures in subsequent years.