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.
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 »
The analysis of Market Value Added (MVA) for the period ending December 31, 2022, reveals a trajectory characterized by rapid expansion followed by a moderate contraction. MVA experienced significant growth between 2018 and 2020, reaching a peak of US$ 58,397 million, before entering a downward trend in the subsequent two fiscal years.
- Market Value Trends
- The fair market value exhibited a strong upward trajectory from 2018 to 2020, rising from US$ 34,931 million to a peak of US$ 78,729 million. Following this peak, a consistent decline was observed, with the value dropping to US$ 67,175 million in 2021 and further decreasing to US$ 58,576 million by the end of 2022.
- Invested Capital Evolution
- Invested capital showed a steady increase from US$ 16,084 million in 2018 to a peak of US$ 22,243 million in 2021. This suggests a consistent expansion of the capital base over four years. A reversal occurred in 2022, where invested capital declined to US$ 19,837 million.
- Market Value Added (MVA) Analysis
- The MVA grew aggressively between 2018 and 2020, increasing from US$ 18,847 million to US$ 58,397 million. This surge indicates that the market perceived a significant increase in value creation well beyond the actual capital invested during this period. From 2021 onward, MVA contracted to US$ 44,932 million and finally to US$ 38,739 million in 2022, reflecting a reduction in the premium the market assigned to the company's invested capital.
Overall, the data indicates that while the company successfully generated substantial market value relative to its investment through 2020, the subsequent decline in market valuation outpaced the reduction in invested capital, leading to a lower, though still positive, MVA by the end of 2022.
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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 | 38,739) | 44,932) | 58,397) | 30,854) | 18,847) | |
| Invested capital2 | 19,837) | 22,243) | 20,332) | 17,047) | 16,084) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 195.29% | 202.00% | 287.22% | 180.99% | 117.18% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Alphabet Inc. | 533.88% | 988.84% | — | — | — | |
| Comcast Corp. | 23.25% | 50.35% | — | — | — | |
| Meta Platforms Inc. | 380.86% | 579.06% | — | — | — | |
| Netflix Inc. | 371.80% | 453.21% | — | — | — | |
| Walt Disney Co. | 34.30% | 103.57% | 101.22% | — | — | |
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 × 38,739 ÷ 19,837 = 195.29%
4 Click competitor name to see calculations.
The financial data indicates a period of significant value creation between 2018 and 2020, followed by a corrective phase from 2021 through 2022. The overall trajectory reflects a substantial increase in market valuation relative to the capital invested, although the magnitude of this premium peaked in 2020.
- Market Value Added (MVA)
- An aggressive upward trend is observed from 2018 to 2020, with MVA rising from 18,847 million US$ to a peak of 58,397 million US$. This represents a more than threefold increase in the value added to the company's market capitalization over a two-year period. However, a subsequent decline occurred in 2021 and 2022, with the value receding to 38,739 million US$ by the end of the period. Despite this contraction, the MVA remained significantly higher in 2022 than at the 2018 baseline.
- Invested Capital
- Invested capital demonstrated a steady increase for the majority of the analyzed period, growing from 16,084 million US$ in 2018 to a peak of 22,243 million US$ in 2021. This suggests a consistent expansion of the capital base used to generate returns. A reduction in invested capital was noted in 2022, where the figure decreased to 19,837 million US$, indicating a shift in capital allocation or a reduction in assets.
- MVA Spread Ratio
- The MVA spread ratio exhibited high volatility, mirroring the fluctuations in market value. The ratio grew from 117.18% in 2018 to a peak of 287.22% in 2020, indicating a period of exceptional efficiency in generating market value over the invested capital base. Following this peak, the ratio underwent a sharp correction to 202.00% in 2021 and further softened to 195.29% in 2022. The persistence of a ratio well above 100% suggests that the market continued to value the company significantly higher than the nominal value of its invested capital throughout the five-year window.
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MVA Margin
Activision Blizzard Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 38,739) | 44,932) | 58,397) | 30,854) | 18,847) | |
| Net revenues | 7,528) | 8,803) | 8,086) | 6,489) | 7,500) | |
| Add: Increase (decrease) in deferred revenues | 970) | (571) | 314) | (118) | (436) | |
| Adjusted net revenues | 8,498) | 8,232) | 8,400) | 6,371) | 7,064) | |
| Performance Ratio | ||||||
| MVA margin2 | 455.86% | 545.82% | 695.20% | 484.28% | 266.80% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Alphabet Inc. | 381.04% | 655.85% | — | — | — | |
| Comcast Corp. | 41.05% | 99.16% | — | — | — | |
| Meta Platforms Inc. | 332.57% | 454.84% | — | — | — | |
| Netflix Inc. | 443.55% | 529.22% | — | — | — | |
| Walt Disney Co. | 70.59% | 263.91% | 272.21% | — | — | |
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 × 38,739 ÷ 8,498 = 455.86%
3 Click competitor name to see calculations.
The analysis of market value added (MVA) and MVA margin from 2018 to 2022 reveals a period of aggressive expansion followed by a moderate contraction. A distinct peak in both market valuation and margin is observed in 2020, after which a downward trend persists through 2022.
- Market Value Added (MVA)
- MVA experienced substantial growth during the first three years of the period, increasing from US$ 18,847 million in 2018 to a peak of US$ 58,397 million in 2020. Following this peak, a contraction occurred, with values declining to US$ 44,932 million in 2021 and further to US$ 38,739 million by December 31, 2022.
- Adjusted Net Revenues
- Revenues demonstrated a non-linear trend, starting at US$ 7,064 million in 2018 and experiencing a slight decline to US$ 6,371 million in 2019. A significant increase occurred in 2020, reaching US$ 8,400 million. Revenues remained relatively stable thereafter, concluding the period at US$ 8,498 million in 2022.
- MVA Margin
- The MVA margin mirrored the trajectory of the absolute MVA, starting at 266.80% in 2018 and rising sharply to a maximum of 695.20% in 2020. This surge indicates that market valuation grew at a rate significantly exceeding the growth of adjusted net revenues. A subsequent decline is noted, with the margin falling to 545.82% in 2021 and 455.86% in 2022.
The data suggests a decoupling between revenue performance and market valuation after 2020. While adjusted net revenues maintained a higher plateau from 2020 through 2022, the MVA and MVA margin entered a period of decline. This indicates that the premium the market was willing to pay over the invested capital decreased, despite the company maintaining its revenue gains.
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