Microsoft Excel LibreOffice Calc

Market Value Added (MVA)

Difficulty: Advanced

Market value added (MVA) is the difference between a firms's 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

Cisco Systems Inc., MVA calculation

USD $ in millions

Microsoft Excel LibreOffice Calc
Jul 29, 2017 Jul 30, 2016 Jul 25, 2015 Jul 26, 2014 Jul 27, 2013 Jul 28, 2012
Fair value of Debt1 35,345  30,901  26,603  22,408  17,610  18,831 
PV of operating lease payments2 1,151  1,079  1,060  1,146  1,040  1,019 
Market value of common equity 157,274  157,802  133,112  126,766  129,535  100,934 
Preferred stock, no par value; none issued and outstanding
Noncontrolling interests (1) 15 
Less: Available-for-sale investments 58,784  58,125  53,539  45,348  42,685  38,917 
Market (fair) value of Cisco 134,986  131,656  107,245  104,979  105,508  81,883 
Less: Invested capital3 57,436  48,667  44,439  43,608  43,554  38,374 
MVA 77,550  82,989  62,806  61,371  61,954  43,508 

Source: Based on data from Cisco Systems Inc. Annual Reports

1 Fair value of debt. See Details »

2 Present value of operating lease payments. See Details »

3 Invested capital. See Details »

Item Description The company
MVA Cisco's market (fair) value less invested capital. Cisco Systems Inc.'s MVA increased from 2015 to 2016 but then slightly declined from 2016 to 2017.

MVA Spread

Cisco Systems Inc., MVA spread calculation

Microsoft Excel LibreOffice Calc
Jul 29, 2017 Jul 30, 2016 Jul 25, 2015 Jul 26, 2014 Jul 27, 2013 Jul 28, 2012
Selected Financial Data (USD $ in millions)
Market value added (MVA)1 77,550  82,989  62,806  61,371  61,954  43,508 
Invested capital2 57,436  48,667  44,439  43,608  43,554  38,374 
Ratio
MVA spread3 135.02% 170.52% 141.33% 140.73% 142.25% 113.38%

Source: Based on data from Cisco Systems Inc. Annual Reports

2017 Calculations

1 MVA. See Details »

2 Invested capital. See Details »

3 MVA spread = 100 × MVA ÷ Invested capital
= 100 × 77,550 ÷ 57,436 = 135.02%

Ratio Description The company
MVA spread The ratio of MVA to invested capital. It measures the efficiency with which investors' capital investment has translated into a franchise value and into an aggregate net present value premium. Cisco Systems Inc.'s MVA spread improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

MVA Margin

Cisco Systems Inc., MVA margin calculation

Microsoft Excel LibreOffice Calc
Jul 29, 2017 Jul 30, 2016 Jul 25, 2015 Jul 26, 2014 Jul 27, 2013 Jul 28, 2012
Selected Financial Data (USD $ in millions)
Market value added (MVA)1 77,550  82,989  62,806  61,371  61,954  43,508 
Revenue 48,005  49,247  49,161  47,142  48,607  46,061 
Increase (decrease) in deferred revenue 2,022  1,289  1,041  719  543  673 
Ratio
MVA margin2 155.02% 164.22% 125.11% 128.23% 126.05% 93.10%

Source: Based on data from Cisco Systems Inc. Annual Reports

2017 Calculations

1 MVA. See Details »

2 MVA margin = 100 × MVA ÷ (Revenue + Change in deferred revenue)
= 100 × 77,550 ÷ (48,005 + 2,022) = 155.02%

Ratio Description The company
MVA margin The ratio of MVA to sales. It measures how efficiently and prodigiously sales translate into franchise value. Cisco Systems Inc.'s MVA margin improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017.