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
Keurig Dr Pepper 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).
1 Fair value of debt. See details »
2 Invested capital. See details »
Between December 31, 2018, and December 31, 2021, a consistent expansion in shareholder wealth creation is observed, characterized by a widening gap between the market valuation and the capital invested in the business.
- Market Value Trajectory
- The fair market value experienced a steady upward trend, rising from US$ 51,421 million in 2018 to US$ 66,587 million by the end of 2021. This represents a sustained increase in the market's valuation of the entity over the four-year period.
- Invested Capital Stability
- Invested capital remained remarkably stable, showing minimal fluctuations. Starting at US$ 44,635 million in 2018, it concluded the period at US$ 44,109 million in 2021. The relative stagnation of the capital base indicates that the increase in market value was not a result of additional capital injections.
- Market Value Added (MVA) Expansion
- The Market Value Added demonstrated significant acceleration, growing from US$ 6,786 million in 2018 to US$ 22,478 million in 2021. This substantial increase indicates that the market is valuing the company increasingly higher than the actual capital employed, suggesting strong investor confidence and the creation of significant value above the cost of capital.
The divergence between a stable invested capital base and a rising market valuation underscores a strong positive trend in value creation, as the MVA more than tripled over the observed timeframe.
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MVA Spread Ratio
Keurig Dr Pepper Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Market value added (MVA)1 | 22,478) | 16,285) | 11,917) | 6,786) | |
| Invested capital2 | 44,109) | 43,835) | 44,138) | 44,635) | |
| Performance Ratio | |||||
| MVA spread ratio3 | 50.96% | 37.15% | 27.00% | 15.20% | |
| Benchmarks | |||||
| MVA Spread Ratio, Competitors4 | |||||
| Coca-Cola Co. | 289.24% | — | — | — | |
| Mondelēz International Inc. | 85.16% | — | — | — | |
| PepsiCo Inc. | 297.67% | — | — | — | |
| Philip Morris International Inc. | 585.34% | — | — | — | |
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).
1 MVA. See details »
2 Invested capital. See details »
3 2021 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 22,478 ÷ 44,109 = 50.96%
4 Click competitor name to see calculations.
Analysis of the financial performance from 2018 to 2021 reveals a significant and consistent increase in value creation relative to the capital employed. While the company's capital base remained nearly constant, the market's valuation of the entity grew substantially, indicating a marked improvement in perceived corporate value and operational efficiency.
- Market Value Added (MVA)
- A strong upward trend is observed in the Market Value Added, which grew from 6,786 million US dollars in 2018 to 22,478 million US dollars by the end of 2021. This continuous expansion demonstrates that the market value of the company has increased significantly above the total capital invested over the analyzed period.
- Invested Capital
- Invested capital remained remarkably stable, fluctuating minimally between a high of 44,635 million US dollars in 2018 and a low of 43,835 million US dollars in 2020, before closing at 44,109 million US dollars in 2021. The stability of this metric indicates that the growth in MVA was driven by organic value creation and market appreciation rather than an increase in the capital base.
- MVA Spread Ratio
- The MVA spread ratio exhibited a steep and linear increase, rising from 15.20% in 2018 to 50.96% in 2021. This growth suggests a widening gap between the return on invested capital and the cost of capital, reflecting a highly positive trend in the company's ability to generate wealth for its shareholders.
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MVA Margin
Keurig Dr Pepper Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Market value added (MVA)1 | 22,478) | 16,285) | 11,917) | 6,786) | |
| Net sales | 12,683) | 11,618) | 11,120) | 7,442) | |
| Performance Ratio | |||||
| MVA margin2 | 177.23% | 140.17% | 107.17% | 91.18% | |
| Benchmarks | |||||
| MVA Margin, Competitors3 | |||||
| Coca-Cola Co. | 600.94% | — | — | — | |
| Mondelēz International Inc. | 182.53% | — | — | — | |
| PepsiCo Inc. | 261.55% | — | — | — | |
| Philip Morris International Inc. | 543.41% | — | — | — | |
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).
1 MVA. See details »
2 2021 Calculation
MVA margin = 100 × MVA ÷ Net sales
= 100 × 22,478 ÷ 12,683 = 177.23%
3 Click competitor name to see calculations.
Analysis of the financial metrics from 2018 to 2021 indicates a strong upward trajectory in both shareholder value creation and revenue generation. The growth in market value added has significantly outpaced the growth in net sales, resulting in a substantial expansion of the MVA margin over the four-year period.
- Market Value Added (MVA)
- A consistent and accelerating increase is observed, with MVA rising from US$ 6,786 million in 2018 to US$ 22,478 million by 2021. This represents a total increase of approximately 231%, signaling a substantial increase in the company's market value relative to the capital contributed by investors.
- Net Sales Performance
- Net sales exhibited a steady upward trend, starting at US$ 7,442 million in 2018 and reaching US$ 12,683 million in 2021. The most significant year-over-year growth occurred between 2018 and 2019, followed by a more moderate but stable growth rate through the end of the period.
- MVA Margin Trends
- The MVA margin shows a marked improvement, climbing from 91.18% in 2018 to 177.23% in 2021. Because the MVA margin grew more rapidly than net sales, it can be inferred that the market is attributing increasing value to the organization's strategic positioning and future earnings potential beyond simple revenue expansion.
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