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
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 »
Between 2019 and 2023, the trajectory of value creation shows a period of significant expansion in market value added, followed by a correction and subsequent stabilization. The overall trend indicates that the market valuation of the entity has consistently remained above the capital invested throughout the five-year period.
- Market Value Trends
- The fair market value experienced a gradual increase from 42,831 million USD in 2019 to a peak of 46,578 million USD in 2021. This growth was followed by a contraction in 2022 to 42,965 million USD, with a marginal recovery to 43,261 million USD by the end of 2023.
- Invested Capital Movements
- Invested capital exhibited a downward trajectory during the first half of the analyzed period, decreasing from 35,495 million USD in 2019 to a low of 29,074 million USD in 2021. A slight increase occurred in 2022 to 30,859 million USD, followed by a minor decrease to 30,476 million USD in 2023.
- Market Value Added Analysis
- The market value added (MVA) rose sharply from 7,336 million USD in 2019 to a peak of 17,504 million USD in 2021. This acceleration was driven by the combined effect of rising market valuations and a reduction in the invested capital base. In 2022, a notable decline to 12,106 million USD was observed, resulting from a decrease in market value coinciding with an increase in invested capital. By December 31, 2023, the MVA showed a slight recovery, closing at 12,785 million USD.
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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 | 12,785) | 12,106) | 17,504) | 12,935) | 7,336) | |
| Invested capital2 | 30,476) | 30,859) | 29,074) | 31,408) | 35,495) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 41.95% | 39.23% | 60.20% | 41.18% | 20.67% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| FedEx Corp. | 43.85% | 39.69% | 83.76% | — | — | |
| Uber Technologies Inc. | 1,007.53% | 372.72% | 331.50% | — | — | |
| Union Pacific Corp. | 196.13% | 160.12% | 224.50% | — | — | |
| United Airlines Holdings Inc. | -6.53% | 2.17% | 9.50% | — | — | |
| United Parcel Service Inc. | 230.88% | 287.06% | 373.66% | — | — | |
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 × 12,785 ÷ 30,476 = 41.95%
4 Click competitor name to see calculations.
Between 2019 and 2023, the financial metrics indicate a period of significant volatility in market value creation, characterized by a sharp peak in 2021 followed by a correction and subsequent stabilization.
- Market Value Added (MVA)
- MVA demonstrated a strong upward trend in the early part of the period, increasing from 7,336 million US$ in 2019 to a peak of 17,504 million US$ in 2021. This growth was followed by a notable decline to 12,106 million US$ in 2022, before recovering slightly to 12,785 million US$ by the end of 2023.
- Invested Capital
- A general reduction in invested capital was observed from 2019 to 2021, falling from 35,495 million US$ to 29,074 million US$. Following this decline, the capital base stabilized, recording 30,859 million US$ in 2022 and 30,476 million US$ in 2023.
- MVA Spread Ratio
- The MVA spread ratio experienced a dramatic expansion, rising from 20.67% in 2019 to a peak of 60.20% in 2021. This suggests a substantial increase in the market's valuation of the company relative to the capital invested. A sharp contraction occurred in 2022, with the ratio dropping to 39.23%, and it remained relatively stable at 41.95% in 2023.
The correlation between the decreasing invested capital and the increasing MVA through 2021 contributed to the rapid acceleration of the MVA spread ratio. The subsequent stabilization of both invested capital and MVA from 2022 to 2023 has resulted in a spread ratio that has settled significantly higher than the 2019 baseline.
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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 | 12,785) | 12,106) | 17,504) | 12,935) | 7,336) | |
| Operating revenues | 52,788) | 48,971) | 29,882) | 17,337) | 45,768) | |
| Performance Ratio | ||||||
| MVA margin2 | 24.22% | 24.72% | 58.58% | 74.61% | 16.03% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| FedEx Corp. | 33.82% | 28.21% | 64.08% | — | — | |
| Uber Technologies Inc. | 423.49% | 191.05% | 305.35% | — | — | |
| Union Pacific Corp. | 500.31% | 384.62% | 599.66% | — | — | |
| United Airlines Holdings Inc. | -5.49% | 1.98% | 20.01% | — | — | |
| United Parcel Service Inc. | 115.39% | 128.11% | 170.51% | — | — | |
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 × 12,785 ÷ 52,788 = 24.22%
3 Click competitor name to see calculations.
The financial trajectory between 2019 and 2023 reveals a complex relationship between market value creation and operational recovery. While absolute market value added experienced growth during the initial period of operational instability, the efficiency of this value relative to revenue shifted significantly as operations normalized.
- Market Value Added (MVA)
- An upward trajectory is observed from 2019 to 2021, with MVA increasing from 7,336 million US$ to a peak of 17,504 million US$. A subsequent contraction occurred in 2022, where the value declined to 12,106 million US$, followed by a marginal recovery to 12,785 million US$ by the end of 2023.
- Operating Revenues
- Operating revenues exhibited a severe contraction in 2020, falling to 17,337 million US$ from 45,768 million US$ in 2019. A consistent recovery period followed, with revenues climbing to 29,882 million US$ in 2021 and surpassing 2019 levels by 2022 and 2023, ultimately reaching 52,788 million US$.
- MVA Margin
- The MVA margin showed extreme volatility, peaking at 74.61% in 2020. This surge was mathematically driven by the precipitous decline in operating revenues occurring simultaneously with an increase in MVA. As revenues recovered, the margin underwent a steady normalization, decreasing to 58.58% in 2021 and stabilizing at 24.72% in 2022 and 24.22% in 2023.
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