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
Twenty-First Century Fox Inc., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30).
1 Fair value of debt. See details »
2 Invested capital. See details »
An analysis of the Market Value Added (MVA) from 2013 to 2018 reveals significant volatility in market perception and value creation, despite a relatively stable base of invested capital. The MVA experienced a cyclical pattern, peaking in 2014, declining to a trough in 2016, and subsequently recovering to its highest level in 2018.
- Market Value Fluctuations
- The fair market value exhibited substantial variance over the period. After an initial increase to 108,598 million USD in 2014, a downward trend occurred over the following two years, reaching a period low of 75,988 million USD in 2016. A strong recovery followed, culminating in a peak value of 109,843 million USD by June 30, 2018.
- Invested Capital Stability
- Invested capital remained comparatively consistent, fluctuating within a narrow range between 42,462 million USD and 48,265 million USD. This stability indicates that the changes in MVA were primarily driven by shifts in market valuation and investor expectations rather than significant changes in the company's internal capital structure or asset base.
- Market Value Added (MVA) Trends
- The MVA mirrored the trajectory of the market value, starting at 53,766 million USD in 2013 and rising to 60,333 million USD in 2014. A sharp contraction followed, with MVA dropping to 33,526 million USD by 2016, representing a decline of approximately 44% from the 2014 peak. However, the period concluded with a significant surge, as MVA reached its maximum observed value of 62,572 million USD in 2018, suggesting a substantial increase in shareholder wealth creation relative to the capital invested.
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MVA Spread Ratio
Twenty-First Century Fox Inc., MVA spread ratio calculation, comparison to benchmarks
| Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | Jun 30, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Market value added (MVA)1 | 62,572) | 34,655) | 33,526) | 41,648) | 60,333) | 53,766) | |
| Invested capital2 | 47,272) | 45,055) | 42,462) | 44,315) | 48,265) | 44,434) | |
| Performance Ratio | |||||||
| MVA spread ratio3 | 132.37% | 76.92% | 78.95% | 93.98% | 125.01% | 121.00% | |
| Benchmarks | |||||||
| MVA Spread Ratio, Competitors4 | |||||||
| Alphabet Inc. | — | — | — | — | — | — | |
| Comcast Corp. | — | — | — | — | — | — | |
| Meta Platforms Inc. | — | — | — | — | — | — | |
| Netflix Inc. | — | — | — | — | — | — | |
| Walt Disney Co. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30).
1 MVA. See details »
2 Invested capital. See details »
3 2018 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 62,572 ÷ 47,272 = 132.37%
4 Click competitor name to see calculations.
The financial performance between June 30, 2013, and June 30, 2018, is characterized by significant volatility in market-based valuation metrics despite a relatively stable base of invested capital. The relationship between market value added and the capital employed indicates fluctuating investor confidence and varying returns over the six-year period.
- Market Value Added (MVA)
- A non-linear trend is observed in the MVA, which peaked initially in 2014 at 60,333 million USD before experiencing a sustained decline over the next three years. The lowest valuation occurred on June 30, 2016, reaching 33,526 million USD. However, a sharp recovery followed, culminating in a period high of 62,572 million USD by June 30, 2018, representing a substantial increase in market valuation relative to the book value of invested capital.
- Invested Capital
- Invested capital remained comparatively stable throughout the analyzed timeframe, fluctuating within a narrow range between 42,462 million USD and 48,265 million USD. The lack of dramatic shifts in the capital base suggests that the volatility observed in the MVA was driven by external market perceptions and equity pricing rather than significant changes in the company's internal asset base or capital structure.
- MVA Spread Ratio
- The MVA spread ratio mirrored the volatility of the MVA, starting at 121.00% in 2013 and reaching a peak of 125.01% in 2014. A notable contraction occurred between 2015 and 2017, with the ratio falling below the 100% threshold to a low of 76.92% in 2017. This decline indicates a period where the value created for shareholders relative to the cost of capital was diminished. A rapid reversal occurred in 2018, with the ratio surging to 132.37%, the highest level recorded in the period, signaling a strong recovery in value creation efficiency.
The divergence between the stability of invested capital and the volatility of the MVA spread ratio suggests that the entity's market premium is highly sensitive to periodic fluctuations. The recovery observed in 2018 indicates a significant realignment of market value upward, far exceeding the modest increase in invested capital during the same year.
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MVA Margin
Twenty-First Century Fox Inc., MVA margin calculation, comparison to benchmarks
| Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | Jun 30, 2015 | Jun 30, 2014 | Jun 30, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Market value added (MVA)1 | 62,572) | 34,655) | 33,526) | 41,648) | 60,333) | 53,766) | |
| Revenues | 30,400) | 28,500) | 27,326) | 28,987) | 31,867) | 27,675) | |
| Add: Increase (decrease) in deferred revenue | 98) | 75) | 57) | (242) | 13) | (203) | |
| Adjusted revenues | 30,498) | 28,575) | 27,383) | 28,745) | 31,880) | 27,472) | |
| Performance Ratio | |||||||
| MVA margin2 | 205.17% | 121.28% | 122.43% | 144.89% | 189.25% | 195.71% | |
| Benchmarks | |||||||
| MVA Margin, Competitors3 | |||||||
| Alphabet Inc. | — | — | — | — | — | — | |
| Comcast Corp. | — | — | — | — | — | — | |
| Meta Platforms Inc. | — | — | — | — | — | — | |
| Netflix Inc. | — | — | — | — | — | — | |
| Walt Disney Co. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30).
1 MVA. See details »
2 2018 Calculation
MVA margin = 100 × MVA ÷ Adjusted revenues
= 100 × 62,572 ÷ 30,498 = 205.17%
3 Click competitor name to see calculations.
Between June 30, 2013, and June 30, 2018, the company's market value added (MVA) and corresponding MVA margin exhibited significant volatility, characterized by a mid-period decline followed by a substantial recovery in the final fiscal year.
- Market Value Added (MVA) Trends
- The MVA experienced an initial increase from 53,766 million USD in 2013 to 60,333 million USD in 2014. This growth was followed by a period of contraction, with values falling to 41,648 million USD in 2015 and reaching a low of 33,526 million USD in 2016. After stabilizing in 2017, a sharp ascent occurred in 2018, bringing the MVA to 62,572 million USD, representing the highest absolute value within the analyzed period.
- Adjusted Revenues Performance
- Adjusted revenues remained relatively stable compared to the fluctuations seen in MVA. Revenues peaked in 2014 at 31,880 million USD before declining to a low of 27,383 million USD in 2016. A gradual recovery trend followed, with revenues rising to 30,498 million USD by June 30, 2018.
- MVA Margin Analysis
- The MVA margin, which relates market value creation to revenue, mirrored the trend of the absolute MVA. A steady decline is observed from 195.71% in 2013 to a low of 121.28% in 2017. This downward trajectory indicates a reduction in the market's valuation of the company relative to its revenue generation during those years. However, the margin experienced a significant reversal in 2018, surging to 205.17%, which indicates that the increase in market value far exceeded the proportional growth in adjusted revenues.
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