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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- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Operating Profit Margin since 2012
- Return on Equity (ROE) since 2012
- Total Asset Turnover since 2012
- Price to Book Value (P/BV) since 2012
- Analysis of Debt
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MVA
Kraft Foods Group Inc., MVA calculation
US$ in millions
| Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | ||
|---|---|---|---|---|
| Fair value of debt1 | ||||
| Operating lease liability | ||||
| Market value of common equity | ||||
| Market (fair) value of Kraft Foods Group | ||||
| Less: Invested capital2 | ||||
| MVA |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of Kraft Foods Group
- The market value of the company increased steadily over the three-year period, rising from $42,536 million in 2012 to $49,101 million in 2014. This reflects a positive growth trend with a total increase of approximately 15.4% from 2012 to 2014. The growth accelerated slightly in the last year, with a 11.7% increase from 2013 to 2014, compared to a 3.3% increase from 2012 to 2013.
- Invested capital
- The invested capital exhibited a fluctuating trend. It increased significantly from $13,807 million in 2012 to $16,041 million in 2013, which is a 16.1% increase, indicating a substantial increase in resources tied up in the business during that period. However, in 2014, the invested capital decreased to $14,787 million, representing a reduction of 7.8%, suggesting a possible divestment or greater efficiency in capital allocation.
- Market value added (MVA)
- The market value added, which represents the difference between the market value and invested capital, showed variability. MVA decreased slightly from $28,729 million in 2012 to $27,932 million in 2013, a decline of about 2.8%. Despite this dip, MVA increased notably in 2014 to $34,313 million, a 22.9% rise from the previous year. This recovery indicates an improvement in the company's ability to generate value beyond its invested capital by the end of the period.
- Overall insights
- The overall market value growth alongside the initial rise and subsequent decline in invested capital suggests that the company may have improved capital efficiency by 2014. The increase in MVA in the final year signifies enhanced shareholder value creation despite the reduced invested capital. The trends indicate solid performance in market valuation with strategic capital management over the period analyzed.
MVA Spread Ratio
Kraft Foods Group Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | ||
|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||
| Market value added (MVA)1 | ||||
| Invested capital2 | ||||
| Performance Ratio | ||||
| MVA spread ratio3 | ||||
| Benchmarks | ||||
| MVA Spread Ratio, Competitors4 | ||||
| lululemon athletica inc. | ||||
| Nike Inc. | ||||
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
1 MVA. See details »
2 Invested capital. See details »
3 2014 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The financial data reveals several significant trends regarding the company's market value added (MVA), invested capital, and MVA spread ratio over the three-year period ending December 27, 2014.
- Market Value Added (MVA)
- The MVA exhibits a fluctuating pattern. It declined slightly from 28,729 million US dollars in 2012 to 27,932 million US dollars in 2013, before rising substantially to 34,313 million US dollars in 2014. This increase in 2014 suggests an improvement in market perception or operational efficiency that positively impacted the company's market value relative to its capital invested.
- Invested Capital
- The invested capital amount increased notably from 13,807 million US dollars in 2012 to 16,041 million US dollars in 2013, indicating an expansion in the capital base. However, in 2014, invested capital decreased to 14,787 million US dollars, which may reflect divestitures, asset sales, or more efficient use of capital during that year.
- MVA Spread Ratio
- This ratio experienced a decline from 208.07% in 2012 to 174.12% in 2013, aligning with the reduction in MVA and the increase in invested capital during the same period. Nonetheless, in 2014 the MVA spread ratio increased sharply to 232.05%, marking the highest ratio in the three years. This suggests that the company generated a significantly higher return over its cost of capital in 2014 compared to previous years.
Overall, the data shows that while 2013 was characterized by higher invested capital but lower market value added and spread ratio, 2014 reflected improved efficiency and value creation as indicated by higher MVA and MVA spread ratio alongside a reduction in invested capital. These trends imply strengthened financial performance and enhanced market confidence in the latest year of the analysis.
MVA Margin
Kraft Foods Group Inc., MVA margin calculation, comparison to benchmarks
| Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | ||
|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||
| Market value added (MVA)1 | ||||
| Net revenues | ||||
| Performance Ratio | ||||
| MVA margin2 | ||||
| Benchmarks | ||||
| MVA Margin, Competitors3 | ||||
| lululemon athletica inc. | ||||
| Nike Inc. | ||||
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
1 MVA. See details »
2 2014 Calculation
MVA margin = 100 × MVA ÷ Net revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market value added (MVA)
- The market value added experienced a slight decline from 28,729 million US dollars in 2012 to 27,932 million US dollars in 2013, followed by a noticeable increase to 34,313 million US dollars in 2014. This indicates a recovery and growth phase in terms of market value during the last observed year.
- Net revenues
- Net revenues remained relatively stable across the three years, showing a marginal decrease from 18,339 million US dollars in 2012 to 18,218 million US dollars in 2013, and a further slight decline to 18,205 million US dollars in 2014. This stability suggests consistent operational performance with little volatility in sales revenue.
- MVA margin
- The MVA margin followed a downward trend between 2012 and 2013, dropping from 156.65% to 153.32%. However, a significant increase occurred in 2014, reaching 188.48%. This rise implies an improvement in the market value created relative to net revenues, reflecting enhanced value generation for shareholders in the latest fiscal year.