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.
MVA
Dollar Tree Inc., MVA calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
1 Fair value of debt. See details »
2 Invested capital. See details »
The analysis of Market Value Added (MVA) from 2017 to 2022 reveals a general expansion in shareholder wealth creation, characterized by a significant increase in the premium the market assigns to the company relative to its invested capital.
- Market Value Trajectory
- The market value exhibited an overall upward trend, increasing from US$ 30.79 billion in 2017 to US$ 44.12 billion by January 2022. A significant contraction is observed in February 2020, where the value declined to US$ 28.32 billion, followed by a robust recovery in 2021 and further acceleration in 2022.
- Invested Capital Trends
- Invested capital remained relatively stable over the six-year period. After reaching a peak of US$ 19.85 billion in 2018, a downward adjustment occurred, with capital levels settling around US$ 17.0 billion between 2019 and 2020. A gradual increase followed, reaching US$ 18.20 billion by January 2022.
- Market Value Added (MVA) Performance
- MVA grew from US$ 11.62 billion in 2017 to a period high of US$ 25.92 billion in 2022. While a sharp decline was recorded in 2020—dropping to US$ 11.33 billion in alignment with the dip in market value—the subsequent recovery was aggressive. The widening gap between market value and invested capital indicates that the market perceived an increase in the company's ability to generate value above its cost of capital toward the end of the analyzed period.
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MVA Spread Ratio
Dollar Tree Inc., MVA spread ratio calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Market value added (MVA)1 | 25,921,466) | 17,832,418) | 11,334,220) | 18,348,557) | 14,960,722) | 11,619,907) | |
| Invested capital2 | 18,201,900) | 17,693,200) | 16,987,300) | 17,010,987) | 19,846,068) | 19,165,878) | |
| Performance Ratio | |||||||
| MVA spread ratio3 | 142.41% | 100.79% | 66.72% | 107.86% | 75.38% | 60.63% | |
| Benchmarks | |||||||
| MVA Spread Ratio, Competitors4 | |||||||
| Costco Wholesale Corp. | 601.38% | 635.70% | — | — | — | — | |
| Target Corp. | 289.75% | 247.97% | — | — | — | — | |
| Walmart Inc. | 201.42% | 174.24% | — | — | — | — | |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
1 MVA. See details »
2 Invested capital. See details »
3 2022 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 25,921,466 ÷ 18,201,900 = 142.41%
4 Click competitor name to see calculations.
The financial trajectory from January 28, 2017, to January 29, 2022, is characterized by a general expansion in shareholder value creation, evidenced by a significant increase in Market Value Added (MVA) and a corresponding rise in the MVA spread ratio. Despite a notable period of volatility in 2020, the company demonstrated a strong recovery, ending the analyzed period with a peak in its ability to generate market value relative to its invested capital.
- Market Value Added (MVA)
- An overall upward trend is observed, with MVA rising from 11,619,907 thousand US$ in 2017 to 25,921,466 thousand US$ by 2022. This growth was interrupted on February 1, 2020, when MVA declined to 11,334,220 thousand US$, marking the lowest value in the sequence. However, a rapid recovery followed, with values surging in 2021 and 2022.
- Invested Capital
- Invested capital exhibited relative stability over the six-year period, fluctuating between a high of 19,846,068 thousand US$ in 2018 and a low of 16,987,300 thousand US$ in 2020. A period of capital contraction occurred between 2018 and 2020, followed by a gradual increase to 18,201,900 thousand US$ by the end of the period.
- MVA Spread Ratio
- The MVA spread ratio shows substantial improvement in value creation efficiency, increasing from 60.63% in 2017 to 142.41% in 2022. The ratio peaked at 107.86% in 2019 before dropping to 66.72% in 2020. The subsequent climb to 142.41% suggests that the market's valuation of the company grew at a significantly faster rate than the capital invested in its operations during the final two years of the analysis.
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MVA Margin
Dollar Tree Inc., MVA margin calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Market value added (MVA)1 | 25,921,466) | 17,832,418) | 11,334,220) | 18,348,557) | 14,960,722) | 11,619,907) | |
| Net sales | 26,309,800) | 25,508,400) | 23,610,800) | 22,823,300) | 22,245,500) | 20,719,200) | |
| Performance Ratio | |||||||
| MVA margin2 | 98.52% | 69.91% | 48.00% | 80.39% | 67.25% | 56.08% | |
| Benchmarks | |||||||
| MVA Margin, Competitors3 | |||||||
| Costco Wholesale Corp. | 85.51% | 94.36% | — | — | — | — | |
| Target Corp. | 82.41% | 80.82% | — | — | — | — | |
| Walmart Inc. | 55.42% | 51.59% | — | — | — | — | |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
1 MVA. See details »
2 2022 Calculation
MVA margin = 100 × MVA ÷ Net sales
= 100 × 25,921,466 ÷ 26,309,800 = 98.52%
3 Click competitor name to see calculations.
The financial trajectory from 2017 to 2022 exhibits a general expansion in market value and sales, although market value addition experienced significant volatility during the middle of the period.
- Market Value Added (MVA)
- MVA grew steadily from approximately 11.6 billion USD in January 2017 to 18.3 billion USD by February 2019. A notable contraction occurred in February 2020, where the value declined to 11.3 billion USD. However, a strong recovery followed, with MVA increasing to 17.8 billion USD in January 2021 and reaching a period peak of 25.9 billion USD by January 2022.
- Net Sales Performance
- Net sales demonstrated consistent and uninterrupted growth throughout the analyzed timeframe. Starting at 20.7 billion USD in 2017, sales increased annually, reaching 26.3 billion USD by 2022. This linear growth suggests a stable expansion of the operational base despite the fluctuations observed in market valuation.
- MVA Margin Trends
- The MVA margin fluctuated in alignment with market value changes rather than sales growth. The margin rose from 56.08% in 2017 to a peak of 80.39% in 2019, before dropping sharply to 48.00% in 2020. The final two years saw a rapid ascent, concluding at 98.52% in 2022, indicating that market valuation grew at a rate significantly outpacing the increase in net sales toward the end of the period.
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