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
NXP Semiconductors N.V., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
The financial performance between 2017 and 2021 indicates a strong upward trajectory in shareholder value creation, characterized by a significant expansion of Market Value Added (MVA) over the five-year period.
- Market Valuation Trends
- The market fair value experienced initial volatility, decreasing from US$ 47,126 million in 2017 to US$ 35,464 million in 2018. However, a sustained recovery followed, with the valuation climbing to US$ 40,444 million in 2019, US$ 58,477 million in 2020, and reaching a peak of US$ 62,016 million by the end of 2021.
- Invested Capital Dynamics
- A consistent reduction in invested capital was observed from 2017 through 2020, with the balance falling from US$ 20,519 million to US$ 16,335 million. A marginal increase occurred in 2021, bringing the total to US$ 16,745 million. This overall trend suggests a strategic optimization of the capital base or a reduction in the total assets required to sustain operations.
- Market Value Added (MVA) Performance
- MVA mirrored the volatility of the market value in the early stages, dropping from US$ 26,607 million in 2017 to US$ 17,457 million in 2018. Subsequently, a period of aggressive value growth ensued, with MVA ascending to US$ 45,271 million by 2021. This substantial increase was driven by the diverging trends of a rising market capitalization and a contracting invested capital base, reflecting heightened investor confidence in the company's ability to generate returns above its cost of capital.
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MVA Spread Ratio
NXP Semiconductors N.V., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 45,271) | 42,142) | 23,492) | 17,457) | 26,607) | |
| Invested capital2 | 16,745) | 16,335) | 16,952) | 18,006) | 20,519) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 270.36% | 257.98% | 138.58% | 96.95% | 129.67% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Advanced Micro Devices Inc. | 2,219.60% | — | — | — | — | |
| Analog Devices Inc. | 117.94% | 210.89% | — | — | — | |
| Applied Materials Inc. | 815.05% | 555.54% | — | — | — | |
| Broadcom Inc. | 373.48% | 237.62% | — | — | — | |
| Intel Corp. | 138.47% | — | — | — | — | |
| KLA Corp. | 735.96% | — | — | — | — | |
| Lam Research Corp. | 617.13% | — | — | — | — | |
| Marvell Technology Inc. | 270.10% | — | — | — | — | |
| Micron Technology Inc. | 81.70% | — | — | — | — | |
| NVIDIA Corp. | 2,455.53% | — | — | — | — | |
| Qualcomm Inc. | 739.14% | 815.45% | — | — | — | |
| Texas Instruments Inc. | 887.48% | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2021 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 45,271 ÷ 16,745 = 270.36%
4 Click competitor name to see calculations.
The financial trajectory from 2017 to 2021 indicates a substantial increase in shareholder value creation relative to the capital employed. While there was initial volatility in 2018, the subsequent years demonstrate a strong positive correlation between rising market valuation and a lean capital base, resulting in a significant expansion of the MVA spread ratio.
- Market Value Added (MVA)
- Market value added exhibited a volatile but upward trend over the five-year period. Following a decline from US$ 26,607 million in 2017 to US$ 17,457 million in 2018, a period of accelerated growth ensued. MVA increased to US$ 23,492 million in 2019 and climbed sharply to US$ 42,142 million by 2020, eventually reaching US$ 45,271 million by the end of 2021. This progression reflects a strengthening market perception of the company's future earning potential.
- Invested Capital
- Invested capital showed a consistent downward trend for the majority of the observed period. Capital decreased from US$ 20,519 million in 2017 to a low of US$ 16,335 million in 2020. A marginal increase was noted in 2021, bringing the total to US$ 16,745 million. This trend suggests a strategic reduction in the capital base or highly efficient capital management during a period of growth.
- MVA Spread Ratio
- The MVA spread ratio experienced an exponential increase, mirroring the divergence between rising MVA and falling invested capital. After dropping to 96.95% in 2018, the ratio recovered to 138.58% in 2019 and then surged to 257.98% in 2020 and 270.36% in 2021. The fact that the ratio more than doubled between 2019 and 2021 indicates that the market is valuing the company at a significantly higher multiple of its invested capital, signaling high corporate efficiency and strong value generation.
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MVA Margin
NXP Semiconductors N.V., MVA margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 45,271) | 42,142) | 23,492) | 17,457) | 26,607) | |
| Revenue | 11,063) | 8,612) | 8,877) | 9,407) | 9,256) | |
| Performance Ratio | ||||||
| MVA margin2 | 409.21% | 489.33% | 264.63% | 185.58% | 287.46% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Advanced Micro Devices Inc. | 836.71% | — | — | — | — | |
| Analog Devices Inc. | 757.72% | 685.43% | — | — | — | |
| Applied Materials Inc. | 520.10% | 422.74% | — | — | — | |
| Broadcom Inc. | 879.63% | 656.02% | — | — | — | |
| Intel Corp. | 155.07% | — | — | — | — | |
| KLA Corp. | 725.36% | — | — | — | — | |
| Lam Research Corp. | 497.72% | — | — | — | — | |
| Marvell Technology Inc. | 828.99% | — | — | — | — | |
| Micron Technology Inc. | 135.02% | — | — | — | — | |
| NVIDIA Corp. | 1,919.74% | — | — | — | — | |
| Qualcomm Inc. | 445.16% | 615.38% | — | — | — | |
| Texas Instruments Inc. | 793.86% | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 20-F (reporting date: 2018-12-31), 20-F (reporting date: 2017-12-31).
1 MVA. See details »
2 2021 Calculation
MVA margin = 100 × MVA ÷ Revenue
= 100 × 45,271 ÷ 11,063 = 409.21%
3 Click competitor name to see calculations.
The financial period from 2017 to 2021 is characterized by a substantial expansion in market value added relative to revenue growth, indicating a strong increase in market confidence and perceived corporate value.
- Market Value Added (MVA) Trends
- A non-linear growth pattern is observed in the MVA, which began at 26,607 million US dollars in 2017 and concluded at 45,271 million US dollars in 2021. A notable decline occurred in 2018, with values dropping to 17,457 million US dollars, followed by a period of aggressive acceleration. The most significant leap occurred between 2019 and 2020, where MVA increased by approximately 79%, reflecting a sharp rise in the difference between the market value and the capital contributed by investors.
- Revenue Performance
- Revenue levels remained comparatively stable between 2017 and 2020, fluctuating within a range between 8,612 million and 9,407 million US dollars. However, a significant upward shift is observed in 2021, as revenue climbed to 11,063 million US dollars. This indicates that the expansion in market value preceded the actual surge in top-line revenue.
- MVA Margin Analysis
- The MVA margin demonstrates significant volatility, starting at 287.46% in 2017 and experiencing a contraction to 185.58% in 2018. A strong recovery trend followed, culminating in a peak of 489.33% in 2020. Although the margin moderated to 409.21% in 2021, the overall trajectory suggests that market valuation has consistently outpaced revenue growth, signaling that the market assigns a high premium to the organization's strategic positioning and future earning potential.
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