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
- Cash Flow Statement
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Analysis of Debt
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MVA
Cadence Design Systems Inc., MVA calculation
US$ in thousands
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 financial data reveals several key trends in the company’s valuation and capital investment over the five-year period ending December 31, 2024.
- Market (Fair) Value
- The market value of the company demonstrates a substantial increase from 2020 through 2023, rising from approximately $37.7 billion to $82.5 billion. This reflects significant growth in the company's perceived market worth over these years. However, in 2024, there is a noticeable decline to about $73.3 billion, suggesting a reduction in market valuation compared to the prior year.
- Invested Capital
- Invested capital shows a consistent upward trend throughout the period. Starting at around $2.8 billion in 2020, the capital invested increased steadily each year, reaching $4.1 billion by 2023. In 2024, there is a marked jump to approximately $7.2 billion, indicating a substantial increase in capital investment during the most recent year observed.
- Market Value Added (MVA)
- MVA follows a trajectory similar to market value. From just under $35 billion in 2020 and 2021, it grows significantly to nearly $48 billion in 2022 and then surges sharply to approximately $78.5 billion in 2023. In 2024, MVA decreases to about $66 billion, mirroring the decline seen in market value but still remaining well above earlier years.
Overall, the data indicates robust growth in market valuation and invested capital from 2020 to 2023, with the sharpest increases occurring between 2022 and 2023. The year 2024 shows a departure from this growth trend, characterized by a significant reduction in market value and MVA despite a large increase in invested capital. This divergence may suggest challenges affecting market perception or profitability relative to investment in that year.
MVA Spread Ratio
Cadence Design Systems Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday 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.
The financial data indicates notable shifts in market value added (MVA), invested capital, and MVA spread ratio over the five-year span.
- Market Value Added (MVA)
- The MVA shows an increasing trend from 34.86 billion US dollars in 2020 to a peak of approximately 78.49 billion in 2023, followed by a decline to 66.01 billion in 2024. This suggests significant growth in the company's market value relative to invested capital up through 2023, with some reduction occurring in the last recorded year.
- Invested Capital
- Invested capital demonstrates a consistent upward progression, rising from roughly 2.83 billion in 2020 to 7.25 billion in 2024. The increase is relatively steady year-over-year, with a pronounced jump between 2023 and 2024. This reflects increased allocation of resources or assets utilized to support company operations and growth.
- MVA Spread Ratio
- The MVA spread ratio, which measures the success in generating market value relative to invested capital, varies significantly across the years. It starts at approximately 1233% in 2020, slightly declines in 2021 to 1111%, then rises sharply to 1302% in 2022 and peaks at 1935% in 2023. The ratio then falls markedly to 911% in 2024. This volatility indicates fluctuations in how effectively invested capital is translated into market value.
Overall, the data points to strong growth in market value and capital investment through the majority of the period, with exceptional gains in 2023. The subsequent decline in MVA and spread ratio in 2024, despite substantially higher invested capital, may suggest challenges in maintaining the same level of market value creation relative to investment.
MVA Margin
Cadence Design Systems 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 thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenue | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday 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 revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added shows a pronounced increasing trend from 2020 through 2023, rising significantly from approximately $34.86 billion in 2020 to about $78.49 billion in 2023. However, this upward momentum reversed in 2024, with the MVA declining to approximately $66.01 billion, indicating a notable reduction after the prior year's peak.
- Adjusted Revenue
- The adjusted revenue demonstrates consistent growth across the entire period under review. Starting at roughly $2.81 billion in 2020, it increments steadily each year, reaching nearly $4.73 billion by the end of 2024. This steady increase suggests robust underlying operational performance and revenue expansion.
- MVA Margin
- The MVA margin, representing the ratio of Market Value Added to adjusted revenue, exhibits fluctuation throughout the years. It starts at 1241.37% in 2020, decreases somewhat in 2021 to 1128.47%, then climbs back to 1299.21% in 2022. The margin peaks in 2023 at 1927.61%, reflecting a period of exceptional market value growth relative to revenue before declining to 1395.62% in 2024. Despite the variability, the margin remains significantly elevated relative to the starting point, indicating strong market value creation compared to revenue.
- Summary Insights
- The overall trends suggest that the company experienced substantial value creation between 2020 and 2023, outpacing revenue growth notably during this time. The peak in MVA and MVA margin in 2023 implies heightened investor confidence or market valuation relative to earnings. However, the decrease in MVA and MVA margin in 2024, despite continued revenue growth, may point to a reassessment of market value or external factors impacting valuation. The steady growth in revenue indicates ongoing operational strength, while the volatility in market value metrics suggests fluctuations in market perception or external economic influences.