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
Marriott International Inc., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
The financial trajectory of Market Value Added (MVA) demonstrates a period of rapid expansion followed by a moderate contraction. Between 2015 and 2017, there was a substantial increase in the gap between market value and invested capital, indicating significant value creation for shareholders during this interval.
- Market Value Trends
- The fair market value exhibited aggressive growth, rising from 21,433 million USD in 2015 to a peak of 60,540 million USD in 2017. This growth represented a nearly three-fold increase over two years. Subsequent years saw a gradual decline, with the value settling at 51,023 million USD by the end of 2019.
- Invested Capital Dynamics
- A sharp escalation in invested capital occurred between 2015 and 2016, increasing from 758 million USD to 16,537 million USD. Following this surge, the capital base remained relatively stable, fluctuating between 13,992 million USD and 14,627 million USD from 2017 through 2019.
- Market Value Added (MVA) Performance
- MVA increased steadily from 20,675 million USD in 2015 to a maximum point of 46,311 million USD in 2017. This trajectory indicates that the market's valuation of the company's future growth potential peaked in 2017. From 2018 onwards, a downward trend is observed, with MVA decreasing to 37,031 million USD by 2019, correlating with the reduction in overall market capitalization.
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MVA Spread Ratio
Marriott International Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 37,031) | 38,483) | 46,311) | 27,076) | 20,675) | |
| Invested capital2 | 13,992) | 14,627) | 14,229) | 16,537) | 758) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 264.66% | 263.10% | 325.48% | 163.72% | 2,728.35% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Airbnb Inc. | — | — | — | — | — | |
| Booking Holdings Inc. | — | — | — | — | — | |
| Chipotle Mexican Grill Inc. | — | — | — | — | — | |
| DoorDash, Inc. | — | — | — | — | — | |
| McDonald’s Corp. | — | — | — | — | — | |
| Starbucks Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2019 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 37,031 ÷ 13,992 = 264.66%
4 Click competitor name to see calculations.
The financial trajectory between 2015 and 2019 indicates a period of significant capital restructuring followed by a phase of stabilization in value creation.
- Market Value Added (MVA)
- A strong growth trend is observed from 2015 through 2017, with MVA increasing from US$ 20,675 million to a peak of US$ 46,311 million. This upward momentum reversed after 2017, as the value declined to US$ 38,483 million in 2018 and further to US$ 37,031 million by the end of 2019.
- Invested Capital
- A substantial expansion in the capital base occurred between December 31, 2015, and December 31, 2016, during which invested capital rose from US$ 758 million to US$ 16,537 million. Following this sharp increase, the invested capital remained relatively consistent over the next three years, ending the period at US$ 13,992 million in 2019.
- MVA Spread Ratio
- The MVA spread ratio exhibited extreme volatility in the early part of the period, starting at 2,728.35% in 2015, a result of the disproportionately low invested capital relative to the market value added. Following the 2016 capital surge, the ratio corrected to 163.72%, subsequently peaking at 325.48% in 2017. For the final two years of the analysis, the ratio stabilized, recording 263.10% in 2018 and 264.66% in 2019.
The data suggests that while the company underwent a massive shift in its capital structure in 2016, it managed to maintain a consistently high MVA spread ratio in the following years, indicating that the market continued to value the company significantly above its invested capital base.
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MVA Margin
Marriott International Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 37,031) | 38,483) | 46,311) | 27,076) | 20,675) | |
| Revenues | 20,972) | 20,758) | 22,894) | 17,072) | 14,486) | |
| Add: Increase (decrease) in deferred revenue | 129) | 146) | —) | —) | —) | |
| Adjusted revenues | 21,101) | 20,904) | 22,894) | 17,072) | 14,486) | |
| Performance Ratio | ||||||
| MVA margin2 | 175.49% | 184.09% | 202.29% | 158.60% | 142.72% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Airbnb Inc. | — | — | — | — | — | |
| Booking Holdings Inc. | — | — | — | — | — | |
| Chipotle Mexican Grill Inc. | — | — | — | — | — | |
| DoorDash, Inc. | — | — | — | — | — | |
| McDonald’s Corp. | — | — | — | — | — | |
| Starbucks Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 MVA. See details »
2 2019 Calculation
MVA margin = 100 × MVA ÷ Adjusted revenues
= 100 × 37,031 ÷ 21,101 = 175.49%
3 Click competitor name to see calculations.
The financial performance from 2015 to 2019 is characterized by a period of aggressive growth in value creation and revenue, peaking in 2017, followed by a moderate contraction and stabilization phase.
- Market Value Added (MVA)
- A significant upward trajectory is observed between 2015 and 2017, with MVA increasing from 20,675 million US$ to a peak of 46,311 million US$. This represents a substantial increase in the market's valuation of the company relative to the capital invested. Following this peak, a decline occurred in 2018 and 2019, with the value settling at 37,031 million US$ by the end of the period.
- Adjusted Revenues
- Revenue growth patterns closely mirrored the MVA trends. Adjusted revenues rose steadily from 14,486 million US$ in 2015 to a maximum of 22,894 million US$ in 2017. A subsequent dip to 20,904 million US$ in 2018 was followed by a marginal recovery to 21,101 million US$ in 2019, indicating a plateau in top-line growth after the 2017 peak.
- MVA Margin
- The MVA margin, which measures value creation efficiency relative to revenue, experienced a strong expansion in the first three years, climbing from 142.72% in 2015 to 202.29% in 2017. This suggests that the company was generating exponentially more market value per dollar of revenue during this window. However, the margin contracted in 2018 to 184.09% and further to 175.49% in 2019, reflecting a reduction in the rate of value creation relative to the revenue base.
The convergence of the peaks in MVA, Adjusted Revenues, and MVA Margin in 2017 suggests a period of optimal market alignment and operational expansion. The subsequent decline in both absolute value and margin indicates a correction or a transition toward a more stable, albeit lower, growth trajectory in the final two years of the analyzed period.
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