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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- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Return on Assets (ROA) since 2005
- Price to Sales (P/S) since 2005
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MVA
Texas Instruments Inc., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 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).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of TI
- The market value exhibited a modest increase from 160,998 million US dollars in 2020 to 167,443 million in 2022. This was followed by a decline to 150,382 million in 2023, before rising again to 175,488 million in 2024. Overall, the market value shows a fluctuating trend with a recovery surpassing prior peaks by 2024.
- Invested capital
- Invested capital consistently increased over the five-year period, beginning at 12,963 million US dollars in 2020 and rising steadily each year to reach 26,167 million in 2024. This represents approximately a doubling of invested capital, indicating sustained investment growth.
- Market value added (MVA)
- Market value added started at 148,035 million US dollars in 2020 and decreased marginally to 145,626 million in 2021. It then rose to 149,880 million in 2022 but experienced a decline to 127,792 million in 2023. The MVA rebounded to 149,321 million in 2024. This reflects variability in value creation, with a dip observed in 2023 followed by recovery.
- Insights
- The increase in invested capital alongside fluctuating market value suggests that while the company has been continuously investing, the market valuation and perceived value creation have experienced volatility. The dip in both market value and MVA in 2023 indicates a potential period of market or operational challenges, but the recovery by 2024 may point to reinforcing investor confidence or improved performance. The overall pattern reflects growth in asset base with intermittent valuation adjustments.
MVA Spread Ratio
Texas Instruments Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| 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. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 MVA. See details »
2 Invested capital. See details »
3 2024 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The financial data reveals several noteworthy trends in the company's value creation and use of capital over the five-year period.
- Market Value Added (MVA)
- The MVA shows fluctuations with an initial slight decrease from 148,035 million USD in 2020 to 145,626 million USD in 2021, followed by a modest recovery to 149,880 million USD in 2022. However, there is a significant drop to 127,792 million USD in 2023 before rebounding to 149,321 million USD in 2024. This pattern indicates variability in the market's assessment of the company’s value beyond the invested capital.
- Invested Capital
- Invested capital demonstrates a consistent upward trend throughout the period, increasing steadily from 12,963 million USD in 2020 to 26,167 million USD in 2024. This growth suggests ongoing investment in capital assets or operations, which could be aimed at supporting future growth or expanding the company’s activities.
- MVA Spread Ratio
- The MVA spread ratio exhibits a marked declining trend, decreasing from a very high 1141.98% in 2020 to 570.65% in 2024. The ratio sharply fell in 2021 and 2022, and then further dropped in 2023, before showing a minimal recovery in 2024. This decline suggests that although the market value added remains substantial, the efficiency or profitability of capital invested is diminishing when comparing the MVA relative to the size of invested capital.
In summary, while the company has consistently increased its invested capital over the years, the corresponding market value added has experienced volatility, and the efficiency of capital utilization, as measured by the MVA spread ratio, is in decline. This could imply increasing capital costs or reduced market confidence in the returns generated from the additional capital invested, warranting closer attention to capital deployment strategies and value generation mechanisms.
MVA Margin
Texas Instruments Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| 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. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 MVA. See details »
2 2024 Calculation
MVA margin = 100 × MVA ÷ Revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
The data indicates notable fluctuations in key financial metrics over the five-year period from 2020 to 2024.
- Market Value Added (MVA)
- The MVA shows an overall stable trend with values ranging between approximately 127,792 million US dollars and 149,880 million US dollars. It experienced a decline from 148,035 million in 2020 to 145,626 million in 2021, followed by a slight increase to 149,880 million in 2022. However, the value decreased again in 2023 to 127,792 million, before rebounding to 149,321 million in 2024. This pattern suggests some volatility in the market valuation component across these years, with recovery occurring towards the end of the period.
- Revenue
- Revenue shows an upward trend from 14,461 million US dollars in 2020 to a peak of 20,028 million in 2022. After this peak, there is a consistent decline over the next two years, reaching 15,641 million US dollars in 2024. This indicates that while revenues initially improved substantially, there has been a downturn in the latter years, signaling potential challenges in sustaining growth or shifts in market demand or operations.
- MVA Margin (%)
- The MVA margin starts high at 1023.69% in 2020, followed by a significant decrease to 793.86% in 2021. It continues decreasing marginally in 2022 and 2023 to 748.35% and 729.45% respectively. However, there is a marked improvement in 2024, with the margin rising again to 954.68%. This indicates that while the efficiency or profitability in terms of MVA relative to revenue declined over the initial part of the period, there is an indication of a recovery in 2024.
In summary, the company exhibits fluctuations in both market value added and revenue over the analyzed timeframe. The initial growth in revenue up to 2022 is not sustained, with a decline in the subsequent years, while MVA follows a somewhat volatile but recoverable pattern. The MVA margin trend suggests diminishing returns relative to revenue initially, followed by a partial recovery at the end of the observed period. These dynamics may point to operational or market factors affecting financial performance and valuation efficiency that warrant further investigation.