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
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2012
- Operating Profit Margin since 2012
- Total Asset Turnover since 2012
- Price to Sales (P/S) since 2012
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MVA
Diamondback Energy Inc., MVA calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2017-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
The financial data over the five-year period from 2017 to 2021 illustrates significant fluctuations in the market value and invested capital of the company, alongside corresponding changes in market value added (MVA).
- Market (fair) value
- The market value showed a considerable increase from 14,120 million USD in 2017 to a peak of 22,173 million USD in 2018. This was followed by a decline to 16,598 million USD in 2019. In 2020, the value slightly recovered to 18,136 million USD and then surged to 30,995 million USD in 2021, the highest value in the given period. Overall, despite some volatility, the market value grew substantially by the end of 2021.
- Invested capital
- Invested capital exhibited a strong upward trend from 7,167 million USD in 2017 to 22,002 million USD in 2019, reflecting increased capital deployment. However, it declined sharply in 2020 to 16,329 million USD, before rising again to 21,230 million USD in 2021. This pattern suggests a phase of capital contraction in 2020, possibly linked to external conditions, followed by renewed investment in 2021.
- Market value added (MVA)
- MVA started positively at 6,953 million USD in 2017 but dropped significantly to 1,869 million USD in 2018, indicating a reduction in value creation relative to invested capital despite the market value increase. In 2019, MVA turned negative, reaching -5,404 million USD, which is indicative of the market value falling below the invested capital, signaling value erosion. In 2020, MVA rebounded to 1,807 million USD, suggesting some recovery in market confidence or operational performance. By 2021, MVA substantially increased to 9,765 million USD, reflecting considerable value creation beyond the invested capital.
Overall, the data reveals that the company experienced volatility in market valuation and capital investment during the period, with a notable downturn in 2019 impacting value added negatively. The recovery and significant growth in both market value and MVA in 2021 point to improved market perceptions and possibly stronger operational or financial performance in that year.
MVA Spread Ratio
Diamondback Energy Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
Based on: 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), 10-K (reporting date: 2017-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2021 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The MVA exhibited considerable fluctuations over the analyzed periods. Starting at a high level of $6,953 million in 2017, it sharply declined to $1,869 million in 2018, followed by a significant negative value of -$5,404 million in 2019. This negative MVA indicates that the market value was below the invested capital in that year. Subsequent years saw a recovery, with MVA rising to $1,807 million in 2020 and reaching a peak of $9,765 million in 2021, suggesting an improved market perception and value creation during this later period.
- Invested Capital
- Invested capital showed an overall increasing trend with some variations. It began at $7,167 million in 2017 and surged dramatically to $20,304 million in 2018. This growth continued moderately to $22,002 million in 2019, but then decreased to $16,329 million in 2020. The capital invested rebounded in 2021 to $21,230 million. This pattern reflects fluctuations in the company’s capital allocation and investment activities, with a notable decrease in 2020 possibly linked to external conditions or strategic decisions.
- MVA Spread Ratio
- The MVA spread ratio, which indicates value creation efficiency relative to invested capital, mirrored the volatility seen in MVA. It began at a high 97.01% in 2017, dropped sharply to 9.21% in 2018, and turned negative to -24.56% in 2019, aligning with the negative market value added of that year. There was a recovery in the following years, with the ratio rising to 11.06% in 2020 and further improving to 45.99% in 2021. This trend suggests cyclical challenges in value creation but highlights a strong recovery and better capital utilization efficiency by the end of the period.
MVA Margin
Diamondback Energy Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Revenue from contracts with customers | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
Based on: 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), 10-K (reporting date: 2017-12-31).
1 MVA. See details »
2 2021 Calculation
MVA margin = 100 × MVA ÷ Revenue from contracts with customers
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial data reflects notable fluctuations in key performance indicators over the five-year period analyzed.
- Market Value Added (MVA)
- The MVA exhibited significant variability, beginning with a high positive value of 6,953 million US dollars in 2017. It experienced a sharp decline to 1,869 million in 2018, followed by a negative value of -5,404 million in 2019, indicating value destruction during that year. In 2020, the MVA recovered somewhat to 1,807 million and saw a substantial increase to 9,765 million in 2021, reaching the highest point in the period analyzed.
- Revenue from Contracts with Customers
- Revenue showed an overall upward trend, starting at 1,186 million US dollars in 2017 and increasing to 2,130 million in 2018. This growth accelerated substantially in 2019 to 3,887 million, followed by a dip to 2,756 million in 2020. In 2021, revenue rebounded strongly to 6,747 million, marking the highest annual revenue in the dataset.
- MVA Margin
- The MVA margin percentage mirrored the volatility seen in MVA values. It was exceptionally high at 586.1% in 2017, dropped sharply to 87.77% in 2018, and turned negative to -139.03% in 2019, which corresponds with the negative MVA observed that year. Following a recovery to 65.55% in 2020, the margin increased again to 144.73% in 2021, indicating improved value creation relative to revenues.
Overall, the data suggests the company experienced periods of both substantial value creation and destruction, with a pronounced dip in 2019. Revenue trends generally rose over the period, though with a noticeable decline in 2020 likely reflecting external challenges. The recovery in both MVA and MVA margin by 2021 indicates improved financial performance and enhanced market valuation relative to revenue.