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
Kraft Foods Group Inc., MVA calculation
US$ in millions
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 »
The financial performance regarding shareholder value creation shows a positive trajectory over the three-year period ending December 27, 2014. Market value added demonstrated overall growth, indicating that the market valuation of the organization significantly exceeded the capital invested throughout the observed timeframe.
- Market Value Trends
- A consistent upward trend in market value is observed, rising from 42,536 million US dollars in 2012 to 49,101 million US dollars by 2014. This represents a steady increase in the perceived fair value of the entity by the market.
- Invested Capital Fluctuations
- Invested capital experienced volatility, increasing from 13,807 million US dollars in 2012 to a peak of 16,041 million US dollars in 2013, before contracting to 14,787 million US dollars in 2014.
- Market Value Added (MVA) Analysis
- The MVA remained relatively stable between 2012 and 2013, shifting from 28,729 million US dollars to 27,932 million US dollars. However, a significant increase was recorded in 2014, with MVA rising to 34,313 million US dollars. This growth in the final year was driven by the simultaneous increase in market value and the reduction of invested capital.
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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 | 34,313) | 27,932) | 28,729) | |
| Invested capital2 | 14,787) | 16,041) | 13,807) | |
| Performance Ratio | ||||
| MVA spread ratio3 | 232.05% | 174.12% | 208.07% | |
| 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 × 34,313 ÷ 14,787 = 232.05%
4 Click competitor name to see calculations.
The analysis of value creation for Kraft Foods Group Inc. between 2012 and 2014 indicates a volatile but ultimately positive trajectory in market value generation. A temporary contraction in efficiency and absolute value occurred in 2013, followed by a significant expansion in both market value added and the effectiveness of the capital base by the end of 2014.
- Market Value Added (MVA)
- Market value added exhibited a non-linear trend, decreasing slightly from $28,729 million in 2012 to $27,932 million in 2013, before increasing sharply to $34,313 million by December 2014. This suggests a strong recovery in market perception and shareholder value creation toward the end of the observed period.
- Invested Capital
- Invested capital rose from $13,807 million in 2012 to a peak of $16,041 million in 2013, followed by a reduction to $14,787 million in 2014. The increase in 2013 coincided with a decrease in the spread ratio, suggesting that the additional capital deployed during that year did not immediately yield proportional gains in market value.
- MVA Spread Ratio
- The MVA spread ratio followed a V-shaped pattern, starting at 208.07% in 2012, dipping to 174.12% in 2013, and reaching a peak of 232.05% in 2014. The substantial increase in 2014 demonstrates an enhanced ability to create market value relative to the amount of capital invested, reflecting improved capital efficiency or a positive market re-valuation of the company's assets.
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MVA Margin
Kraft Foods Group Inc., MVA margin calculation, comparison to benchmarks
| Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | ||
|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||
| Market value added (MVA)1 | 34,313) | 27,932) | 28,729) | |
| Net revenues | 18,205) | 18,218) | 18,339) | |
| Performance Ratio | ||||
| MVA margin2 | 188.48% | 153.32% | 156.65% | |
| 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 × 34,313 ÷ 18,205 = 188.48%
3 Click competitor name to see calculations.
The financial performance from December 2012 through December 2014 is characterized by a period of revenue stagnation contrasted with a significant expansion in market valuation. While top-line growth remained flat, the market's perception of the organization's value added relative to its capital increased substantially by the end of the analyzed timeframe.
- Net Revenue Trends
- Net revenues exhibited a slight downward trajectory, moving from US$ 18,339 million in 2012 to US$ 18,205 million in 2014. This represents a marginal decline, indicating a stable but non-growth environment regarding sales volume and pricing during this three-year period.
- Market Value Added (MVA) Performance
- MVA showed initial volatility, decreasing from US$ 28,729 million in 2012 to US$ 27,932 million in 2013, before rising sharply to US$ 34,313 million in 2014. This final increase suggests a strengthening of the market's valuation of the company's invested capital.
- MVA Margin Analysis
- The MVA margin mirrored the trajectory of the absolute MVA. After a minor contraction from 156.65% in 2012 to 153.32% in 2013, the margin expanded significantly to 188.48% by December 2014. The rise in this percentage, occurring simultaneously with stagnant revenues, indicates that the increase in market value was not driven by sales growth but rather by external market factors or internal efficiencies that enhanced investor confidence.
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