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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- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Net Profit Margin since 2013
- Return on Assets (ROA) since 2013
- Current Ratio since 2013
- Price to Book Value (P/BV) since 2013
- Analysis of Revenues
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MVA
American Airlines Group Inc., MVA calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2019-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value
- The market value exhibited an overall upward trend between 2019 and 2021, increasing from approximately $42.8 billion to $46.6 billion. However, this value experienced a decline in 2022 to about $42.9 billion, followed by a slight recovery to roughly $43.3 billion in 2023. The fluctuations suggest some volatility in market perceptions or external market conditions impacting the company's valuation.
- Invested capital
- Invested capital showed a consistent downward trend from 2019 through 2021, decreasing from about $35.5 billion to $29.1 billion. In 2022, there was a moderate increase to approximately $30.9 billion, followed by a minor reduction to $30.5 billion in 2023. This pattern indicates a reduction in the company's invested assets or capital deployment over the earlier years, with stabilization in the most recent periods.
- Market value added (MVA)
- Market value added increased substantially from $7.3 billion in 2019 to a peak of $17.5 billion in 2021, reflecting growing market valuation exceeding invested capital. However, the MVA decreased in 2022 to around $12.1 billion, then slightly improved to $12.8 billion in 2023. This suggests that the company's market premium relative to its invested capital diminished following 2021 but maintained a positive value above $12 billion through the latest period.
- Summary of trends and insights
- Between 2019 and 2021, the company experienced growth in both market value and the market premium over invested capital, indicating strong investor confidence and value creation. The decline in invested capital during this period may reflect asset optimization or divestitures. The subsequent downturn in market value and MVA in 2022 suggests a setback, potentially due to external factors or market conditions, though partial recovery in 2023 points to improving investor perception. The stability in invested capital in the last two years may indicate a strategic pause or consolidation phase in capital allocation. Overall, the data reflects a period of value growth followed by correction and stabilization.
MVA Spread Ratio
American Airlines Group Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2023 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added exhibited a general upward trajectory from 2019 through 2021, increasing from 7,336 million US dollars to 17,504 million US dollars. However, a decline was observed in 2022 where the MVA decreased to 12,106 million US dollars, followed by a slight recovery to 12,785 million US dollars in 2023. Despite the fall after 2021, the 2023 figure remains notably higher than the 2019 level.
- Invested Capital
- Invested Capital showed a decreasing trend from 2019 to 2021, declining from 35,495 million US dollars to 29,074 million US dollars. Subsequently, a modest increase occurred in 2022 to 30,859 million US dollars, followed by a slight decrease to 30,476 million US dollars in 2023. Overall, the invested capital in 2023 is lower than it was in 2019, indicating a reduction in capital investment over the observed period.
- MVA Spread Ratio
- The MVA spread ratio demonstrates a fluctuating pattern over the five-year span. It rose significantly from 20.67% in 2019 to a peak of 60.2% in 2021, indicating a period of enhanced value creation relative to the invested capital. A sharp decline followed in 2022, dropping to 39.23%, and a slight improvement occurred in 2023, reaching 41.95%. Despite volatility, this ratio remains substantially higher in 2023 compared to 2019, suggesting an overall improvement in market value efficiency.
- Summary
- Overall, the data reflect a period of increasing market value added and efficiency up to 2021, followed by a downturn in 2022 with partial recovery in 2023. The invested capital decreased initially but stabilized in later years. The fluctuations in the MVA spread ratio further highlight the changing value generation relative to capital investment, with 2023 maintaining healthier levels compared to 2019 despite the volatility. This implies that while there were challenges after 2021, the underlying capital efficiency and market valuation have not regressed to earlier lows.
MVA Margin
American Airlines Group Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Operating revenues | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 MVA. See details »
2 2023 Calculation
MVA margin = 100 × MVA ÷ Operating revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added demonstrates a general increasing trend from 2019 through 2021, rising from 7,336 million US dollars in 2019 to a peak of 17,504 million US dollars in 2021. However, a noticeable decline occurs afterward, with MVA decreasing to 12,106 million US dollars in 2022 and slightly increasing to 12,785 million US dollars in 2023. This indicates a period of growth followed by some loss in market value, although the value remains higher than the 2019 baseline.
- Operating Revenues
- Operating revenues show a significant decline in 2020, dropping sharply from 45,768 million US dollars in 2019 to 17,337 million US dollars. This is followed by a partial recovery to 29,882 million US dollars in 2021. In subsequent years, revenues increase substantially to 48,971 million US dollars in 2022 and further to 52,788 million US dollars in 2023, surpassing pre-2020 levels. This pattern reflects a strong disruption in 2020 with a robust rebound and growth thereafter.
- MVA Margin
- The MVA margin experiences considerable volatility, starting at 16.03% in 2019 and spiking dramatically to 74.61% in 2020. It then declines to 58.58% in 2021 and drops further to around 24% in both 2022 and 2023. This suggests that while market value added grew disproportionately compared to revenues during 2020 and 2021, its relative efficiency or profitability normalized to lower levels in the later years.
- Overall Insights
- The data indicates a significant operational and market impact around 2020, likely due to external economic factors. The sharp decline in operating revenues and the concurrent spikes in MVA margin imply a challenging year followed by periods of recovery and adjustment. The recovery in revenues by 2022 and 2023 suggests a return to more stable operations, although the downward trend in MVA after 2021 highlights potential pressure on market valuation growth or investor confidence in the latter period.