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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MVA
O’Reilly Automotive Inc., MVA calculation
US$ in thousands
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of O’Reilly
- The market value exhibited a consistent upward trend over the five-year period. Starting at approximately $25.4 billion in 2017, it increased significantly to nearly $49.4 billion by the end of 2021. Notable growth occurred particularly between 2020 and 2021, where the market value rose from approximately $38.1 billion to $49.4 billion, indicating strong market confidence and expansion during that timeframe.
- Invested capital
- Invested capital demonstrated moderate fluctuations with an overall slight increase from 2017 to 2020, moving from about $5.4 billion to approximately $6.2 billion. However, in 2021, there was a decline to roughly $5.8 billion. This reduction might suggest a strategic shift in capital allocation or efficiency improvements, considering the considerable growth in market value during the same period.
- Market value added (MVA)
- The MVA, representing the difference between market value and invested capital, showed a substantial increase throughout the period. It rose from nearly $20.0 billion in 2017 to about $43.6 billion in 2021. This trend indicates that the company’s market value grew at a much faster rate than its invested capital, reflecting strong value creation for shareholders and effective utilization of invested resources.
- Overall Summary
- The data reveals significant growth in market valuation and value creation for shareholders over the five years. While invested capital grew marginally in early years and decreased in the last year, the market value and MVA increased substantially. This suggests improvements in market perception and possibly operational efficiency, as the company succeeded in generating considerable value beyond its invested capital base.
MVA Spread Ratio
O’Reilly Automotive Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Amazon.com Inc. | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (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 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added showed an overall upward trend from 2017 to 2021. Starting at approximately $19.98 billion in 2017, it increased significantly to $28.59 billion in 2018. After a slight decrease to $27.62 billion in 2019, the value resumed growth, reaching $31.85 billion in 2020 and then making a substantial leap to $43.60 billion in 2021. This indicates a strong enhancement in the company’s market valuation over the five-year period.
- Invested Capital
- Invested Capital exhibited moderate fluctuations over the analyzed timeframe. It started at about $5.44 billion in 2017 and increased gradually to peak at $6.20 billion in 2020. However, there was a notable decrease in 2021, dropping to approximately $5.77 billion. This pattern suggests a conservative approach in capital investments or possible asset disposals toward the end of the period.
- MVA Spread Ratio
- The MVA spread ratio experienced marked variability but generally demonstrated a strong positive trend. The ratio rose sharply from 367.32% in 2017 to a high of 509.92% in 2018, followed by a slight dip to 454.54% in 2019. It then increased again to 513.76% in 2020 and surged to a peak of 755.97% in 2021. This progressive growth implies improved efficiency in generating market value over invested capital, reflecting enhanced shareholder value creation.
- Summary
- Overall, the data reflects a company that has significantly increased its market value and market value added relative to invested capital throughout the five years. While invested capital grew moderately, the market valuation and associated ratios outpaced capital investment, indicating strong market confidence and possibly improved operational or financial performance leading to enhanced value creation.
MVA Margin
O’Reilly Automotive Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Sales | ||||||
| Add: Increase (decrease) in deferred revenue liability | ||||||
| Adjusted sales | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Amazon.com Inc. | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 MVA. See details »
2 2021 Calculation
MVA margin = 100 × MVA ÷ Adjusted sales
= 100 × ÷ =
3 Click competitor name to see calculations.
The annual financial data indicates a consistent upward trend across key performance metrics over the five-year period ending December 31, 2021.
- Market Value Added (MVA)
- The Market Value Added shows substantial growth from approximately 19.98 billion US dollars in 2017 to about 43.60 billion US dollars in 2021. This reflects an overall increase of more than 100%, demonstrating a strong enhancement in the company’s market valuation and investor value creation over this timeframe.
- Adjusted Sales
- Adjusted sales increased steadily each year, rising from nearly 8.98 billion US dollars in 2017 to over 13.33 billion US dollars in 2021. This represents a compound growth indicative of expanding revenue streams and successful sales generation activities throughout the period.
- MVA Margin
- The MVA margin, expressed as a percentage, exhibits notable improvement with some fluctuation. Starting at 222.61% in 2017, it surged to nearly 300% in 2018, followed by a slight decrease in 2019 to 272.14%, then remaining relatively stable in 2020 before reaching a peak of 327.14% in 2021. This suggests an increasing efficiency in converting sales into market value added, with an overall positive trend in value creation relative to sales.
In summary, the data reveals strong and sustained financial growth, highlighted by rising sales and a more pronounced increase in market value added. The increase in the MVA margin further indicates enhanced effectiveness in generating market value relative to sales revenue. These trends point toward robust financial health and effective value creation strategies during the analyzed period.