Microsoft Corp. (NASDAQ:MSFT)

Market (fair) value

The market value shows a generally increasing trend over the period from June 30, 2020, to June 30, 2025. Starting at approximately 1.52 trillion US dollars in 2020, it rose to over 3.85 trillion US dollars by 2025. There was a noticeable dip in 2022, as the value decreased from about 2.13 trillion in 2021 to roughly 2.05 trillion in 2022, followed by a steady and significant recovery and growth through 2023 to 2025.

Invested capital

Invested capital exhibits a consistent upward trajectory throughout the years analyzed. Beginning at approximately 107.6 billion US dollars in 2020, the amount nearly quadrupled by 2025, reaching around 430.6 billion. The rate of increase accelerates particularly after 2021, with substantial annual growth evident, reflecting potentially increased investment or capital expenditures over the period.

Market value added (MVA)

The market value added, calculated as the difference between market value and invested capital, also shows a clear increasing trend. Starting at around 1.42 trillion US dollars in 2020, it climbed to an estimated 3.42 trillion in 2025. The pattern follows a similar trajectory to that of the market value, with a slight decline in 2022, then a recovery and strong growth in subsequent years, indicating sustained value creation beyond the invested capital base.

The analysis of the financial data reveals several key trends in the company's value creation and capital investment over the periods under review.

Market Value Added (MVA)

The MVA shows a general upward trend, increasing from approximately $1.42 trillion in mid-2020 to about $3.42 trillion by mid-2025. This indicates substantial growth in market value beyond the invested capital, reflecting strong market confidence and value creation by the company over the five years.

Invested Capital

Invested capital has risen significantly from roughly $108 billion in mid-2020 to nearly $431 billion in mid-2025. This steady increase suggests substantial reinvestment or capital allocation to support business expansion or operations, more than quadrupling the invested amount within the period.

MVA Spread Ratio

The MVA spread ratio, which measures the added market value per unit of invested capital, exhibited a declining pattern from 1315.93% in 2020 to approximately 795.00% in 2025. Although the ratio remains high, the consistent decrease implies that while market value continues to increase, it is growing at a less efficient rate relative to the invested capital over time.

Overall, the data portrays a company with expanding capital investment and rising market value added, yet with diminishing returns on capital in terms of market value spread. This trend suggests that while the company is growing, the incremental market value generated per dollar of invested capital is reducing, which may warrant closer examination of capital efficiency and value generation going forward.

The financial data over the observed periods reveal notable trends in market value added (MVA), adjusted revenue, and MVA margin metrics.

Market Value Added (MVA)

The market value added shows a generally strong upward trajectory from June 30, 2020, through June 30, 2025. Starting at approximately 1.42 trillion US dollars in mid-2020, MVA increased significantly to nearly 2.0 trillion by mid-2021. There was a slight decline by mid-2022, dropping to around 1.86 trillion, followed by steady growth thereafter, reaching over 3.42 trillion US dollars by mid-2025. This pattern suggests overall enhanced shareholder value with a minor interim dip.

Adjusted Revenue

Adjusted revenue demonstrates consistent year-over-year growth throughout the entire span. Beginning at roughly 145 billion US dollars in mid-2020, revenue increased each subsequent year, culminating at approximately 289 billion US dollars in mid-2025. This progressive increase indicates effective revenue-generating capabilities and sustained business expansion over the periods examined.

MVA Margin

The MVA margin percentage presents some volatility but generally exhibits an upward trend starting from about 977% in 2020. It peaked at over 1,148% in 2021, then dipped to approximately 916% in 2022. Following this trough, the margin rebounded and increased continuously to exceed 1,185% by 2025. This fluctuation suggests varying efficiency or market-related factors influencing value creation relative to revenue across different years, yet the overall margins point toward growth in market value relative to revenue over time.

In summary, the data indicate robust revenue growth accompanied by a substantial increase in market value added. Despite some fluctuations in MVA margin, the overall pattern reflects improving value generation metrics. The slight mid-period dips in MVA and MVA margin could correlate with external market conditions or company-specific operational factors, but the general upward trends affirm strong financial performance and growth prospects.