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
Roper Technologies Inc., MVA calculation
US$ in thousands
Based on: 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), 10-K (reporting date: 2018-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of Roper
- The market value of the company demonstrated a consistent upward trend from 2018 through 2021, increasing from approximately $38.3 billion to $54.7 billion. However, in 2022, there was a noticeable decline to about $51.8 billion, suggesting a contraction in market valuation during that year after a period of growth.
- Invested capital
- Invested capital showed a steady increase over the five-year period, beginning at around $14.8 billion in 2018 and rising to approximately $26.2 billion in 2022. Growth was particularly strong between 2019 and 2020, with a substantial jump from $17.2 billion to $23.0 billion. Although there was a slight decrease in 2021 to $22.5 billion, the invested capital rebounded to its highest level by 2022.
- Market value added (MVA)
- The market value added generally increased from 2018 through 2021, starting at roughly $23.5 billion and peaking at about $32.2 billion in 2021. This upward trajectory indicates growing value creation over this timespan. However, in 2022, MVA declined significantly to around $25.6 billion, which reflects the decrease in market valuation relative to invested capital.
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MVA Spread Ratio
Roper Technologies Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | 25,556,403) | 32,230,821) | 27,731,010) | 25,979,669) | 23,465,945) | |
| Invested capital2 | 26,216,800) | 22,504,600) | 23,002,900) | 17,154,600) | 14,785,177) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 97.48% | 143.22% | 120.55% | 151.44% | 158.71% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Apple Inc. | 5,157.62% | 5,626.48% | 4,945.07% | — | — | |
| Arista Networks Inc. | 1,226.33% | 1,872.91% | — | — | — | |
| Cisco Systems Inc. | 214.20% | 329.31% | — | — | — | |
| Dell Technologies Inc. | 31.48% | 53.40% | — | — | — | |
| Lumentum Holdings Inc. | 196.72% | 256.49% | — | — | — | |
| Super Micro Computer Inc. | 91.12% | 50.17% | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2022 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 25,556,403 ÷ 26,216,800 = 97.48%
4 Click competitor name to see calculations.
The analysis of the annual financial data reveals several notable trends in the company's market value added (MVA), invested capital, and MVA spread ratio over the five-year period ending December 31, 2022.
- Market Value Added (MVA)
- The MVA exhibited a general upward trend from 2018 through 2021, increasing from approximately $23.47 billion to over $32.23 billion. This growth indicates a consistent enhancement in the market's valuation of the company's invested capital during that period. However, in 2022, there was a noticeable decline in MVA to approximately $25.56 billion, representing a reduction from the previous year's peak.
- Invested Capital
- Invested capital showed continuous growth throughout the analyzed timeframe. Starting at roughly $14.79 billion in 2018, the invested capital increased substantially to about $26.22 billion by the end of 2022. This steady rise suggests ongoing investments or acquisitions contributing to the company's capital base.
- MVA Spread Ratio
- The MVA spread ratio, reflecting the efficiency of generating value over invested capital, declined over the period. It began at a high level of approximately 158.71% in 2018 and decreased to 97.48% by 2022. While there was a moderate rebound in 2021 to just over 143%, the overall trend reflects diminishing returns in terms of market value added relative to capital invested.
In summary, while the company has progressively increased its invested capital, the boost in market value added has not consistently matched this growth, particularly evident in the latest fiscal year where MVA declined despite higher capital. The declining MVA spread ratio further suggests that the company’s effectiveness in translating invested capital into market value has weakened over the analyzed period. These patterns may prompt a closer examination of capital deployment strategies and market conditions affecting valuation.
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MVA Margin
Roper Technologies Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | 25,556,403) | 32,230,821) | 27,731,010) | 25,979,669) | 23,465,945) | |
| Net revenues | 5,371,800) | 5,777,800) | 5,527,100) | 5,366,800) | 5,191,200) | |
| Add: Increase (decrease) in deferred revenue | 306,000) | 172,600) | 172,700) | 157,300) | 109,500) | |
| Adjusted net revenues | 5,677,800) | 5,950,400) | 5,699,800) | 5,524,100) | 5,300,700) | |
| Performance Ratio | ||||||
| MVA margin2 | 450.11% | 541.66% | 486.53% | 470.30% | 442.70% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Apple Inc. | 609.53% | 653.71% | 648.08% | — | — | |
| Arista Networks Inc. | 844.93% | 1,097.06% | — | — | — | |
| Cisco Systems Inc. | 240.26% | 367.17% | — | — | — | |
| Dell Technologies Inc. | 16.47% | 45.88% | — | — | — | |
| Lumentum Holdings Inc. | 287.34% | 289.28% | — | — | — | |
| Super Micro Computer Inc. | 38.75% | 18.09% | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 MVA. See details »
2 2022 Calculation
MVA margin = 100 × MVA ÷ Adjusted net revenues
= 100 × 25,556,403 ÷ 5,677,800 = 450.11%
3 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals distinct trends in the key performance indicators related to market value added and revenue metrics.
- Market Value Added (MVA)
-
The market value added shows a general upward trend from 2018 through 2021, increasing from approximately 23.47 billion USD to a peak of about 32.23 billion USD. However, there is a noticeable decline in 2022, where the value decreases to approximately 25.56 billion USD. This suggests a period of growth followed by a contraction in market value added in the latest year.
- Adjusted Net Revenues
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Adjusted net revenues demonstrate a steady increase from 5.30 billion USD in 2018 to a high of 5.95 billion USD in 2021. In 2022, however, revenues decline slightly to 5.68 billion USD. The revenue trend aligns with the general performance trajectory seen in the market value added, showing gradual growth with a dip toward the end of the period.
- MVA Margin
-
The MVA margin, expressed as a percentage, follows an increasing trend from 442.7% in 2018 to a peak of 541.66% in 2021. This indicates an improving efficiency or value creation relative to revenues during this period. The margin then falls to 450.11% in 2022, revealing a notable decrease in value added per unit of revenue in the most recent year.
Overall, the data shows a consistent pattern of growth in both market value added and adjusted net revenues through 2021, accompanied by an improving MVA margin. The subsequent decline in 2022 across all three metrics suggests a potential shift in market conditions or operational performance impacting the value creation and revenue generation capabilities of the company during that year.
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