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
Monster Beverage Corp., MVA calculation
US$ in thousands
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
The Market Value Added (MVA) for the period between December 31, 2019, and December 31, 2023, demonstrates a significant upward trajectory, indicating a substantial increase in the wealth created for shareholders above the amount of capital invested in the business. The overall trend reflects strong market confidence and a growing premium assigned to the company's future earning potential.
- Market Valuation Trends
- The market value experienced a consistent growth pattern, rising from 32,997,037 thousand US$ in 2019 to 60,535,580 thousand US$ by 2023. While a moderate contraction occurred in 2021, where the value declined to 42,851,122 thousand US$, the subsequent two years showed an accelerated recovery and expansion, culminating in a peak value at the end of 2023.
- Invested Capital Expansion
- Invested capital showed a steady and linear increase over the five-year period. Starting at 3,936,622 thousand US$ in 2019, the capital base grew consistently each year, reaching 7,284,194 thousand US$ by December 31, 2023. This indicates a disciplined increase in the resources deployed to support operational growth.
- Market Value Added Analysis
- The MVA increased from 29,060,415 thousand US$ in 2019 to 53,251,386 thousand US$ in 2023. The gap between the market value and the invested capital widened significantly, suggesting that the company is generating value at a rate far exceeding its capital costs. The temporary decline in MVA observed in 2021 mirrored the dip in overall market value, but the trend resumed its growth path in 2022 and 2023, reflecting an enhanced market perception of the entity's strategic value.
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MVA Spread Ratio
Monster Beverage Corp., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | 53,251,386) | 44,621,915) | 37,996,663) | 41,015,760) | 29,060,415) | |
| Invested capital2 | 7,284,194) | 5,815,467) | 4,854,459) | 4,323,610) | 3,936,622) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 731.05% | 767.30% | 782.72% | 948.65% | 738.21% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Coca-Cola Co. | 258.44% | 267.55% | 289.24% | — | — | |
| Mondelēz International Inc. | 97.98% | 73.56% | 85.16% | — | — | |
| PepsiCo Inc. | 265.48% | 296.11% | 297.67% | — | — | |
| Philip Morris International Inc. | 265.23% | 327.97% | 585.34% | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2023 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 53,251,386 ÷ 7,284,194 = 731.05%
4 Click competitor name to see calculations.
The financial data for the five-year period ending December 31, 2023, reveals a substantial increase in absolute value creation and capital deployment, accompanied by a fluctuating efficiency ratio in market value generation.
- Market Value Added (MVA)
- Absolute MVA experienced significant growth over the analyzed period, rising from 29,060,415 thousand USD in 2019 to 53,251,386 thousand USD in 2023. While a slight contraction occurred in 2021, the overall trajectory indicates a robust upward trend in the amount of value created for shareholders in excess of the capital invested.
- Invested Capital
- A consistent year-over-year increase in invested capital is observed, growing from 3,936,622 thousand USD in 2019 to 7,284,194 thousand USD in 2023. This steady expansion indicates a continuous growth in the capital base, which nearly doubled over the five-year window.
- MVA Spread Ratio
- The MVA spread ratio peaked at 948.65% in 2020 before entering a gradual decline, reaching 731.05% by 2023. This pattern indicates that while absolute market value continues to rise, the rate of value creation relative to the capital base has diminished since 2020, as the growth in invested capital has outpaced the growth in MVA in recent years.
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MVA Margin
Monster Beverage Corp., MVA margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | 53,251,386) | 44,621,915) | 37,996,663) | 41,015,760) | 29,060,415) | |
| Net sales | 7,140,027) | 6,311,050) | 5,541,352) | 4,598,638) | 4,200,819) | |
| Add: Increase (decrease) in deferred revenue | (20,946) | (18,668) | (24,086) | (21,841) | (24,563) | |
| Adjusted net sales | 7,119,081) | 6,292,382) | 5,517,266) | 4,576,797) | 4,176,256) | |
| Performance Ratio | ||||||
| MVA margin2 | 748.01% | 709.14% | 688.69% | 896.17% | 695.85% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Coca-Cola Co. | 471.88% | 497.46% | 600.94% | — | — | |
| Mondelēz International Inc. | 167.29% | 149.09% | 182.53% | — | — | |
| PepsiCo Inc. | 217.79% | 238.05% | 261.55% | — | — | |
| Philip Morris International Inc. | 387.28% | 489.05% | 543.41% | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 MVA. See details »
2 2023 Calculation
MVA margin = 100 × MVA ÷ Adjusted net sales
= 100 × 53,251,386 ÷ 7,119,081 = 748.01%
3 Click competitor name to see calculations.
The analysis of the financial data from 2019 to 2023 reveals a strong upward trajectory in both absolute market value creation and top-line revenue growth, though the efficiency of value creation relative to sales has exhibited some volatility.
- Market Value Added (MVA)
- A significant overall increase in MVA is observed, rising from approximately 29.06 billion US dollars in 2019 to 53.25 billion US dollars by 2023. While a slight contraction occurred in 2021, where value dipped to approximately 38 billion US dollars, the subsequent recovery was robust, with a consistent climb through 2022 and 2023. This trend indicates a substantial increase in the premium the market assigns to the entity over its invested capital.
- Adjusted Net Sales
- Adjusted net sales demonstrated consistent and uninterrupted growth throughout the five-year period. Revenue increased from 4.18 billion US dollars in 2019 to 7.12 billion US dollars in 2023. The steady nature of this growth suggests a stable expansion of market share or pricing power, providing a reliable foundation for the company's valuation.
- MVA Margin
- The MVA margin, representing the ratio of market value added to adjusted net sales, remained exceptionally high, consistently exceeding 680%. A peak was reached in 2020 at 896.17%, suggesting a period where market valuation grew at a rate significantly outpacing revenue growth. Following a correction in 2021 to 688.69%, the margin began a gradual recovery, reaching 748.01% by the end of 2023. This sustained high margin reflects strong investor confidence in future earnings potential relative to current sales volumes.
In summary, the synchronization of rising net sales and increasing market value added suggests a positive correlation between operational growth and market perception. The ability to maintain an MVA margin well above 700% underscores a valuation driven by high growth expectations and strong intangible asset value.
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