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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- Common-Size Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) since 2005
- Price to Sales (P/S) since 2005
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MVA
Celgene Corp., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of Celgene
- The market value exhibited fluctuations over the five-year period. Starting at approximately 102.7 billion USD in 2014, it decreased to around 90.7 billion USD in 2015, followed by an increase to roughly 102.9 billion USD in 2016. Subsequently, there was a notable decline to approximately 83.4 billion USD in 2017 and further down to about 80.9 billion USD in 2018. Overall, the market value shows a downward trend after peaking in 2016.
- Invested capital
- The invested capital consistently increased throughout the period. Beginning at about 9.8 billion USD in 2014, it nearly doubled to 18.1 billion USD in 2015, and continued growing steadily to reach 18.7 billion USD in 2016, 18.9 billion USD in 2017, and then a significant rise to 27.8 billion USD by the end of 2018. This indicates sustained capital investment or allocation over the years, with substantial growth in the final year.
- Market value added (MVA)
- The market value added, representing the difference between market value and invested capital, shows a general decline across the observed timeline. It starts with a high value of approximately 92.8 billion USD in 2014, dropping to 72.5 billion USD in 2015. After a partial recovery to 84.2 billion USD in 2016, it falls again to 64.5 billion USD in 2017 and further to 53.1 billion USD in 2018. The decreasing MVA trend suggests diminishing market perception of value beyond the invested capital.
- Overall Analysis
- The data indicate that despite a steady increase in invested capital over the years, the market (fair) value did not grow correspondingly and in fact declined after 2016. Consequently, the market value added showed a decreasing pattern, implying that the additional capital investments were not matched by equivalent increases in market capitalization. This could reflect challenges in generating market confidence or returns that justify the growing capital base during the latter years.
MVA Spread Ratio
Celgene Corp., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2018 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 declining trend over the analyzed period. Starting at a high of 92,832 million US dollars at the end of 2014, it decreased in 2015 to 72,544 million and saw a slight recovery in 2016 to 84,232 million. However, subsequent years experienced further declines, reaching 64,500 million in 2017 and falling to 53,085 million by the end of 2018. This pattern indicates a reduction in the value the company has added over its invested capital, suggesting increasing challenges in generating market value.
- Invested Capital
- The invested capital displays a consistently increasing trend over the five years. Beginning with 9,844 million US dollars in 2014, there is a notable rise to 18,136 million in 2015, which then marginally increases through 2016 and 2017 (18,672 million and 18,857 million respectively). The most significant jump occurs in 2018 when invested capital reaches 27,773 million, representing a substantial increase in the firm's capital base. This growing invested capital may reflect expansion initiatives or increased asset accumulation.
- MVA Spread Ratio
- The MVA spread ratio, expressed as a percentage, exhibits a downward trajectory throughout the period. Beginning at an exceptionally high rate of 943.04% in 2014, it dramatically declines to 400.01% in 2015 and slightly increases to 451.11% in 2016. From 2016 onwards, the ratio drops consistently to 342.04% in 2017 and further to 191.14% in 2018. This reduction indicates a diminishing spread between the market value and the cost of invested capital, which might suggest decreasing efficiency in creating shareholder value relative to invested resources.
MVA Margin
Celgene Corp., MVA margin calculation, comparison to benchmarks
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Net product sales | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted net product sales | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).
1 MVA. See details »
2 2018 Calculation
MVA margin = 100 × MVA ÷ Adjusted net product sales
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added exhibited a declining trend over the analyzed period. It started at a high of $92,832 million at the end of 2014 and decreased substantially to $53,085 million by the end of 2018. This represents a significant reduction, indicating a decreasing differential between the company's market value and the capital invested by shareholders over time.
- Adjusted Net Product Sales
- Adjusted net product sales demonstrated consistent growth throughout the period. Beginning at $7,569 million in 2014, sales increased steadily each year, reaching $15,302 million by the end of 2018. This upward trajectory suggests strong revenue growth from product sales during these years.
- MVA Margin
- The margin calculated by dividing MVA by adjusted net product sales showed a marked downward progression. It started at an exceptionally high value of 1226.53% in 2014 and declined each year, falling to 346.92% in 2018. This trend reflects that although sales grew, the market's incremental valuation relative to sales contracted notably.
- Summary
- In summary, the data indicate that while the company achieved substantial growth in product sales over the five-year period, the market value added and its relative margin declined. This pattern may suggest increasing sales volume or price but diminishing market confidence in the company's ability to translate sales growth into proportional increases in market capitalization or shareholder value.