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
- Statement of Comprehensive Income
- Cash Flow Statement
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Price to Book Value (P/BV) since 2005
- Aggregate Accruals
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MVA
3M Co., MVA calculation
US$ in millions
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 3M
- The market value experienced a declining trend over the analyzed period. Starting at $147,217 million in 2017, the value decreased to $130,592 million in 2018 and continued falling to $115,937 million by 2019. Although there was a slight recovery to $124,471 million in 2020, the market value dropped again to $113,160 million in 2021. This indicates overall erosion in market capitalization across these years.
- Invested capital
- Invested capital showed a generally increasing trend throughout the period. It started at $32,308 million in 2017 and remained relatively stable in 2018 at $31,616 million. From 2019 onwards, it increased consistently, reaching $38,698 million in 2019, slightly rising to $38,880 million in 2020, and further increasing to $39,156 million in 2021. This reflects gradual growth in the capital invested in the business.
- Market value added (MVA)
- The market value added declined significantly over the timeframe. Beginning at $114,909 million in 2017, MVA decreased sharply to $98,976 million in 2018, then continued to reduce to $77,239 million by 2019. In 2020, there was a modest rebound to $85,591 million, but MVA declined again in 2021 to $74,004 million. This pattern suggests diminishing value creation relative to the invested capital over the years.
MVA Spread Ratio
3M Co., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
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 shows a declining trend over the observed period. Starting at 114,909 million US dollars at the end of 2017, the value decreases to 98,976 million in 2018, followed by a more pronounced decline to 77,239 million in 2019. A slight recovery is observed in 2020 with an increase to 85,591 million, but this is followed by another drop to 74,004 million in 2021. Overall, there is a consistent downward trajectory with minor fluctuations.
- Invested Capital
- The Invested Capital demonstrates a generally upward movement with some variation. Beginning at 32,308 million US dollars in 2017, it slightly decreases to 31,616 million in 2018, then rises for the next three years: 38,698 million in 2019, 38,880 million in 2020, and 39,156 million in 2021. The increase over the period suggests ongoing investments or asset growth despite the general decline in Market Value Added.
- MVA Spread Ratio
- The MVA spread ratio, expressed as a percentage, follows a downward trend similar to MVA but more pronounced. It starts at a high level of 355.67% in 2017 and decreases steadily each year: 313.06% in 2018, 199.6% in 2019, 220.14% in 2020, and 189% in 2021. While there is a slight uptick in 2020, the overall trajectory indicates a reduction in the spread between market value and invested capital, suggesting diminishing value creation relative to the capital invested.
- Summary
- The data reflects a scenario of declining market value added and spread ratio over a five-year span, indicating challenges in generating market value above invested capital. Despite this, invested capital has generally increased, implying continued capital deployment potentially aiming for future growth or operational expansion. The slight recoveries in 2020 for both MVA and MVA spread could be interpreted as short-term improvements amid a broader downward trend.
MVA Margin
3M Co., 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 millions) | ||||||
| Market value added (MVA)1 | ||||||
| Net sales | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted net sales | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
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 net sales
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added demonstrates a declining trend over the period from 2017 to 2021. Starting at 114,909 million USD in 2017, it decreased progressively each year, reaching 74,004 million USD by the end of 2021. This represents a reduction of approximately 35% over the five-year span, indicating a diminishing gap between the company's market value and the capital invested.
- Adjusted Net Sales
- Adjusted net sales show a generally stable to slightly increasing trend with some fluctuations. The value increased from 31,641 million USD in 2017 to 35,386 million USD in 2021. Noteworthy is a moderate rise in 2018, followed by a slight decline in 2019, stability in 2020, and a notable increase in 2021, suggesting some recovery or growth in revenues towards the end of the period.
- MVA Margin
- The MVA margin, which represents the market value added as a percentage of net sales, also shows a decreasing pattern. It dropped from 363.16% in 2017 to 209.13% in 2021. The margin experienced the steepest declines between 2017 and 2019, with a minor recovery in 2020 before falling again in 2021. This suggests a reduced efficiency in generating market value relative to sales over the years.