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.
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- Income Statement
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
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MVA
ON Semiconductor 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 data spanning from 2019 to 2023 reveals several significant trends regarding the market valuation and capital investment of the company.
- Market (fair) value of onsemi
- This value shows a consistent upward trend over the five-year period, increasing from approximately US$12.9 billion in 2019 to a peak of about US$38.7 billion in 2022. However, there is a slight decline in 2023, with the market value decreasing to around US$37.4 billion. Despite this modest reduction in the last year, the overall trajectory indicates substantial growth in market valuation over time.
- Invested capital
- Invested capital exhibits a marked increase throughout the period. Beginning at nearly US$6.9 billion in 2019, it remains relatively stable in 2020 but then rises steadily each subsequent year, reaching more than US$10.9 billion by the end of 2023. This reflects a continuous infusion of capital resources into the company’s operations or asset base.
- Market Value Added (MVA)
- The MVA, which represents the difference between the market value of the company and its invested capital, also shows a positive and robust growth pattern. Starting at roughly US$6.0 billion in 2019, it more than quadruples by 2022 to approximately US$29.3 billion. A slight decrease to US$26.5 billion occurs in 2023, mirroring the dip seen in the market value. Nevertheless, the MVA remains significantly higher than the initial figure, indicating that the company has created substantial value over the period exceeding its capital investment.
In summary, the company demonstrated strong growth in market valuation and invested capital, with value creation outpacing capital investment over these years. The minor downturn in 2023 suggests a need for ongoing observation but does not detract from the overall positive growth trend observed in the preceding years.
MVA Spread Ratio
ON Semiconductor Corp., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
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 × ÷ =
4 Click competitor name to see calculations.
The financial data over the five-year period reflects significant changes and developments in key financial indicators. The analysis focuses on market value added (MVA), invested capital, and the MVA spread ratio, which collectively highlight the company's value creation relative to its invested resources.
- Market Value Added (MVA)
- The MVA demonstrates a marked upward trend from 2019 to 2022, increasing from approximately $6.03 billion to nearly $29.31 billion. This indicates substantial growth in the market valuation exceeding the capital invested in the company. However, in 2023, there is a noticeable decline to about $26.51 billion, signaling a reduction in the excess market value created relative to the previous year, although it remains significantly higher than the levels observed in 2019 through 2021.
- Invested Capital
- Invested capital shows a steady increase over the entire period, beginning at approximately $6.86 billion in 2019 and rising consistently each year to reach about $10.93 billion by 2023. This steady increase indicates continual reinvestment and growth in the company’s asset base or capital employed, supporting the operational or expansion strategies undertaken.
- MVA Spread Ratio
- The MVA spread ratio, which measures the efficiency of value creation relative to invested capital, exhibits a significant upward trajectory from 87.91% in 2019 to a peak of 312.72% in 2022. This increase reflects progressively enhanced value creation efficiency, possibly due to improved operational performance or market perception. However, in 2023, the ratio declines to 242.64%, signifying a reduction in relative value creation efficiency compared to the previous year, though it remains substantially higher than the starting point in 2019.
Overall, the data reveals a period of strong growth and value creation until 2022, followed by some moderation in 2023. The rise in invested capital alongside increasing MVA and MVA spread ratio up to 2022 indicates effective capital utilization and successful market valuation gains. The slight decline in 2023, while notable, does not erase the overall positive trend observed in earlier years, suggesting a potentially cyclical or strategic adjustment period rather than a fundamental downturn.
MVA Margin
ON Semiconductor Corp., MVA margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Revenue | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
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 ÷ Revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
The analysis of the provided financial data over the five-year period reveals several key trends and insights.
- Market Value Added (MVA)
- The Market Value Added shows a significant upward trajectory from 2019 through 2022, increasing from 6,028,172 thousand US dollars to 29,306,320 thousand US dollars. This growth indicates a strong enhancement in shareholder value over these years. However, in 2023, there is a noticeable decline to 26,509,830 thousand US dollars, suggesting a potential slowdown or market correction after several years of robust growth.
- Revenue
- Revenue demonstrates some volatility within the period. Starting at 5,517,900 thousand US dollars in 2019, it slightly decreased in 2020 to 5,255,000 thousand US dollars, which may reflect challenging market conditions or operational setbacks. Subsequently, revenue rose significantly in 2021 and 2022 to 6,739,800 and 8,326,200 thousand US dollars, respectively, indicating a strong recovery and expansion phase. In 2023, revenue slightly declined to 8,253,000 thousand US dollars, representing a modest contraction but remaining near its peak levels.
- MVA Margin
- The MVA margin, which measures Market Value Added relative to revenue, exhibits a pronounced upward trend until 2022, starting at 109.25% in 2019 and peaking at 351.98% in 2022. This suggests that the company was generating disproportionately higher market value compared to its revenue, reflecting improved efficiency, investor confidence, or strategic value creation. In 2023, the MVA margin decreased to 321.21%, which aligns with the observed reduction in MVA and slight revenue decline, indicating some diminishing returns in market valuation relative to sales.
Overall, the data indicates sustained value creation and revenue growth through 2022, followed by a modest decline in both market valuation and revenue in 2023. The trend in MVA margin suggests that the company was increasingly effective in translating revenue into market value until 2022, with a slight reduction in this efficiency in the most recent year. These patterns highlight a period of strong performance culminating in 2022, with 2023 reflecting a potential transitional phase or external market impacts affecting growth dynamics.