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
CSX Corp., 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 Value Added (MVA) exhibited a strong upward trajectory between 2018 and 2021, followed by a notable correction in 2022. The overall trend indicates that while market valuation grew significantly for several years, it faced a contraction in the final year of the analyzed period.
- Market Valuation Trends
- The fair market value rose consistently from 70,437 million USD in 2018 to a peak of 96,969 million USD in 2021. This represents a substantial increase in market capitalization over a four-year span, which was subsequently reversed in 2022 when the value declined to 81,829 million USD.
- Invested Capital Growth
- Invested capital demonstrated a steady and gradual increase throughout the period, rising from 34,219 million USD in 2018 to 38,278 million USD by 2022. This growth remained linear and exhibited significantly lower volatility compared to the fluctuations observed in market valuation.
- MVA Dynamics and Correlation
- Market Value Added grew from 36,218 million USD in 2018 to a peak of 59,325 million USD in 2021. The subsequent drop to 43,551 million USD in 2022 correlates directly with the contraction in market fair value. Because invested capital continued to rise slightly in 2022, the decrease in MVA was driven entirely by the reduction in market capitalization rather than a reduction in the capital base.
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MVA Spread Ratio
CSX Corp., 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 | 43,551) | 59,325) | 51,077) | 44,701) | 36,218) | |
| Invested capital2 | 38,278) | 37,644) | 37,637) | 34,802) | 34,219) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 113.77% | 157.59% | 135.71% | 128.44% | 105.84% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| FedEx Corp. | 39.69% | 83.76% | — | — | — | |
| Uber Technologies Inc. | 372.72% | 331.50% | — | — | — | |
| Union Pacific Corp. | 160.12% | 224.50% | — | — | — | |
| United Airlines Holdings Inc. | 2.17% | 9.50% | — | — | — | |
| United Parcel Service Inc. | 287.06% | 373.66% | — | — | — | |
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 × 43,551 ÷ 38,278 = 113.77%
4 Click competitor name to see calculations.
An analysis of the financial metrics from 2018 to 2022 reveals a period of significant value expansion followed by a notable correction in the final year. The overall trajectory indicates that the organization successfully increased shareholder value relative to its invested capital for the majority of the period, peaking in 2021.
- Market Value Added (MVA)
- A consistent upward trend is observed from 2018 through 2021, with MVA rising from 36,218 million US$ to a peak of 59,325 million US$. This growth represents a substantial increase in the market's valuation of the company over and above the capital contributed by investors. However, this trend reversed in 2022, where MVA declined to 43,551 million US$, indicating a reduction in the market premium attributed to the company.
- Invested Capital
- Invested capital exhibited a steady and modest increase over the five-year period. Starting at 34,219 million US$ in 2018, it grew to 38,278 million US$ by 2022. The relative stability of this figure suggests that the fluctuations in MVA were driven primarily by market sentiment and operational performance rather than significant changes in the capital base.
- MVA Spread Ratio
- The MVA spread ratio followed a pattern mirroring the MVA trend, starting at 105.84% in 2018 and climbing annually to a high of 157.59% in 2021. This indicates a strengthening ability to generate value in excess of the cost of capital during this timeframe. In 2022, the ratio contracted sharply to 113.77%, reflecting a decrease in value creation efficiency relative to the invested capital, though it remained above the 2018 baseline.
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MVA Margin
CSX Corp., 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 | 43,551) | 59,325) | 51,077) | 44,701) | 36,218) | |
| Revenue | 14,853) | 12,522) | 10,583) | 11,937) | 12,250) | |
| Performance Ratio | ||||||
| MVA margin2 | 293.21% | 473.76% | 482.63% | 374.48% | 295.66% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| FedEx Corp. | 28.21% | 64.08% | — | — | — | |
| Uber Technologies Inc. | 191.05% | 305.35% | — | — | — | |
| Union Pacific Corp. | 384.62% | 599.66% | — | — | — | |
| United Airlines Holdings Inc. | 1.98% | 20.01% | — | — | — | |
| United Parcel Service Inc. | 128.11% | 170.51% | — | — | — | |
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 ÷ Revenue
= 100 × 43,551 ÷ 14,853 = 293.21%
3 Click competitor name to see calculations.
Between 2018 and 2022, the relationship between market valuation and operational revenue exhibited significant volatility. While market value added grew steadily for the first four years of the period, the final year showed a marked divergence where record revenues coincided with a contraction in market value.
- Market Value Added (MVA) Trends
- A consistent upward trajectory was observed from 2018 through 2021, with MVA increasing from 36,218 million to a peak of 59,325 million. This period of growth was interrupted in 2022, when the value declined to 43,551 million, representing a significant correction from the previous year's high.
- Revenue Performance
- Revenue patterns did not mirror MVA trends. A downward trend occurred between 2018 and 2020, with revenue falling from 12,250 million to a low of 10,583 million. A strong recovery followed, with revenue increasing for two consecutive years to reach a five-year peak of 14,853 million by December 31, 2022.
- MVA Margin Analysis
- The MVA margin experienced an aggressive expansion from 295.66% in 2018 to a peak of 482.63% in 2020. This increase occurred despite falling revenues, suggesting that market valuation grew independently of top-line performance during that interval. By 2022, the margin contracted sharply to 293.21%, returning to levels seen in 2018. This decline indicates that the growth in revenue was insufficient to offset the decrease in overall market value added during the final year of the analysis.
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