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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MVA
Cintas Corp., MVA calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
The data reveals a consistent upward trend in the market (fair) value of the company from May 31, 2019, to May 31, 2024. Over these five years, the market value more than doubled, starting at approximately 30 billion and reaching nearly 79 billion US dollars. This indicates a significant growth in market perception and valuation of the company's equity.
Invested capital shows a relatively stable pattern with slight incremental increases each year. Beginning at roughly 6.5 billion US dollars in 2019, it rose modestly to about 7.2 billion by 2024. This suggests that the company has maintained a steady level of capital investment without large fluctuations, reflecting controlled or incremental capital expenditures or reinvestments.
Market value added (MVA), which represents the difference between the market value and invested capital, exhibits a robust growth pattern similar to market value trends. MVA increased from approximately 23.5 billion US dollars in 2019 to over 71 billion in 2024. The widening gap between market value and invested capital over time may imply that the market recognizes substantial value creation beyond the capital invested, potentially indicating effective management performance, strong future growth prospects, or enhanced operational efficiencies.
In summary, while invested capital remained mostly stable with gradual increases, the market value and MVA demonstrated pronounced growth, highlighting a strong positive market response and significant value creation over the five-year span.
- Market (fair) value
- Increased steadily from 30.0 billion US dollars in 2019 to 78.6 billion in 2024, more than doubling over the period.
- Invested capital
- Remained relatively stable with a slow upward trend from 6.5 billion US dollars in 2019 to 7.2 billion in 2024.
- Market value added (MVA)
- Expanded significantly from 23.5 billion US dollars in 2019 to 71.4 billion in 2024, indicating increased value creation relative to invested capital.
MVA Spread Ratio
Cintas Corp., MVA spread ratio calculation
Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).
1 MVA. See details »
2 Invested capital. See details »
3 2024 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
- Market Value Added (MVA)
- The market value added shows a consistent and significant upward trend from 2019 to 2024. Starting at approximately 23.5 billion US dollars in 2019, it increased steadily each year, reaching over 71.4 billion US dollars by 2024. The most notable growth occurred between 2023 and 2024, where the MVA increased by more than 50%, indicating a substantial enhancement in market perception and shareholder value during this period.
- Invested Capital
- Invested capital remained relatively stable throughout the six-year period, fluctuating slightly but maintaining a general range between 6.5 billion and 7.2 billion US dollars. The changes over the years are modest compared to the significant increases observed in MVA. This stability suggests a steady level of capital investment in the business operations without major expansions or contractions.
- MVA Spread Ratio
- The MVA spread ratio, which measures the value added relative to invested capital, demonstrates a robust and accelerating growth trend. Beginning at around 362% in 2019, the ratio increased steadily each year, reaching nearly 990% by 2024. This steep increase indicates a growing value creation efficiency and effectiveness in deploying invested capital. The sharp rise in 2024, in particular, reflects a pronounced improvement in the firm's profitability or market valuation relative to its capital base.
- Overall Analysis
- The data reveals that the company has been successful in enhancing its market value substantially over the given period despite relatively stable invested capital. This pattern suggests improved operational performance, market confidence, or both, leading to considerable value creation. The accelerating MVA spread ratio further highlights an increasing ability to generate market value beyond the capital invested, signaling strong financial health and potential for sustainable growth.
MVA Margin
Cintas Corp., MVA margin calculation
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Market value added (MVA)1 | |||||||
| Revenue | |||||||
| Performance Ratio | |||||||
| MVA margin2 | |||||||
Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).
1 MVA. See details »
2 2024 Calculation
MVA margin = 100 × MVA ÷ Revenue
= 100 × ÷ =
The financial data reveals significant positive trends in key performance indicators over the examined period from 2019 to 2024.
- Market Value Added (MVA)
- The MVA shows a consistent and substantial increase each year. Starting at approximately 23.5 billion US dollars in 2019, it climbs steadily to exceed 71.4 billion US dollars by 2024. This upward trajectory indicates a strengthening of the company’s value creation relative to its capital invested, demonstrating enhanced investor confidence and market perception over time.
- Revenue
- Revenue exhibits a steady growth pattern throughout the period. Beginning at about 6.9 billion US dollars in 2019, revenue increases annually, reaching nearly 9.6 billion US dollars in 2024. This suggests continuous expansion of the company’s sales or service volumes, reflecting successful business operations and growing market demand.
- MVA Margin
- The MVA margin, expressed as a percentage, indicates the efficiency with which the company translates revenues into market value added. The margin rises from 341.21% in 2019 to 744.32% in 2024, with only a slight dip observed in 2022. The significant increase, particularly in the latest year, implies that the company is generating an increasing amount of market value for each unit of revenue, signaling improved operational effectiveness and shareholder value creation.
Overall, the data present a robust picture of financial growth, with both market value and revenue expanding steadily. The increasing MVA margin further underscores a rising capacity to convert revenue into enhanced market valuation, which is a positive indicator of the company’s strategic and operational strengths over the analyzed timeframe.