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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- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Return on Equity (ROE) since 2005
- Analysis of Revenues
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MVA
Amazon.com Inc., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
The analysis of the financial data reveals notable trends in the market value, invested capital, and market value added (MVA) over the five-year period from December 31, 2020, to December 31, 2024.
- Market (fair) value
- The market value exhibits a fluctuating yet generally upward trend. Starting at approximately 1.73 trillion US dollars in 2020, it slightly decreased to about 1.68 trillion in 2021 and then declined more significantly to roughly 1.19 trillion in 2022. However, this was followed by a sharp recovery in 2023 reaching approximately 1.92 trillion and a further substantial increase to around 2.55 trillion in 2024.
- Invested capital
- The invested capital consistently increased each year. It expanded from 150 billion US dollars in 2020 to 203 billion in 2021, followed by subsequent rises to 269 billion in 2022, 327 billion in 2023, and peaking at 375 billion in 2024. This steady growth suggests ongoing investments and resource allocation towards the company's capital base.
- Market Value Added (MVA)
- The MVA, which represents the difference between market value and invested capital, follows trends similar to the market value. It started at about 1.58 trillion US dollars in 2020, decreased progressively to approximately 1.48 trillion in 2021 and then more significantly to 921 billion in 2022. Subsequently, it rebounded strongly to 1.59 trillion in 2023 and surged to over 2.17 trillion in 2024, indicating increased market perception of value beyond the invested capital.
Overall, the data reflects a period of market value and associated market value added decline centered in 2022, followed by considerable recovery and growth in the subsequent two years. Concurrently, invested capital revealed a continuous, steady increase throughout the period, highlighting a strategic expansion or reinforcement of capital investment. The combined insights suggest resilience in market valuation and investor confidence, overcoming the dip observed in 2022, while capital investments persistently support the underlying business growth trajectory.
MVA Spread Ratio
Amazon.com Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2024 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added shows a fluctuating trend over the observed period. It started at approximately 1.58 trillion US dollars in 2020, decreased to around 1.48 trillion in 2021, and fell more sharply to about 921 billion in 2022. However, the value rebounded significantly in the subsequent years, reaching approximately 1.59 trillion in 2023 and surpassing previous levels to attain 2.17 trillion by the end of 2024.
- Invested Capital
- Invested capital exhibits a consistent upward trajectory throughout the period. Beginning at 150 billion US dollars in 2020, it increased steadily each year, rising to 203 billion in 2021, then to 269 billion in 2022, 327 billion in 2023, and reaching 375 billion by the end of 2024. This steady growth indicates ongoing investment and capital deployment within the company.
- MVA Spread Ratio
- The MVA spread ratio, which links the Market Value Added to Invested Capital, declined markedly from a very high level of 1053.43% in 2020 to 728.57% in 2021 and further to 342.01% in 2022. Following 2022, the ratio reversed this downward trend and increased to 487.84% in 2023, continuing upward to 578.29% in 2024. This pattern suggests that, despite increased invested capital, the relative market valuation added per unit of invested capital decreased significantly until 2022 but improved noticeably thereafter.
- Overall Analysis
- The data reveals a period of contraction in market valuation added relative to invested capital between 2020 and 2022, highlighted by declines in both the MVA and MVA spread ratio. This phase may reflect market or operational challenges. From 2023 onward, the company appears to have regained market confidence and value creation capacity, as evidenced by strong rebounds in market value added and the spread ratio, alongside continuous growth in invested capital. The increasing invested capital over the entire period indicates a commitment to expansion or enhancement of operational capacity.
MVA Margin
Amazon.com Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Net sales | ||||||
| Add: Increase (decrease) in unearned revenue | ||||||
| Adjusted net sales | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 MVA. See details »
2 2024 Calculation
MVA margin = 100 × MVA ÷ Adjusted net sales
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added shows fluctuations over the five-year period. Starting at approximately 1.58 million US dollars in 2020, it declined to around 1.48 million in 2021 and further dropped significantly to about 921 thousand in 2022. However, the figure rebounded strongly in the subsequent years, reaching approximately 1.59 million in 2023 and peaking at over 2.17 million in 2024. This indicates a substantial recovery and growth in market value after a sharp decline in 2022.
- Adjusted Net Sales
- Adjusted Net Sales exhibit a consistent upward trend through the years. From 387 billion US dollars in 2020, sales increased steadily to 472 billion in 2021 and 516 billion in 2022. The growth accelerated somewhat in the following years, with sales reaching nearly 580 billion in 2023 and surpassing 641 billion by the end of 2024. This trend reflects ongoing expansion in sales activities and revenue generation.
- MVA Margin
- The MVA Margin also demonstrates significant variability. It begins at a high level of approximately 408.23% in 2020, then declines substantially over the next two years to 312.93% in 2021 and 178.5% in 2022. Following this decline, the margin improves markedly, rising to about 274.96% in 2023 and continuing upward to 338.36% in 2024. This pattern suggests periods of reduced market value efficiency relative to sales, followed by an improvement that correlates with recovery in market value.
- Summary of Trends
- Overall, the data indicates a phase of contraction in market value and margin efficiency during 2021 and 2022, despite ongoing growth in net sales. The subsequent years show recovery and growth in both market value added and MVA margin, with adjusted net sales consistently increasing throughout the period. These trends may imply strategic or market influences affecting valuation metrics differently compared to sales performance.