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
Air Products & Chemicals Inc., MVA calculation
US$ in thousands
Based on: 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30).
1 Fair value of debt. See details »
2 Invested capital. See details »
The data reveals several distinct financial trends over the six-year period ending September 30, 2020.
- Market (fair) value of Air Products
- This value demonstrates a general upward trend across the years. Beginning at approximately 36.65 billion US dollars in 2015, the market value experienced moderate growth through to 2018, with slight fluctuations. A significant increase occurred in 2019, rising sharply to about 55.51 billion US dollars, followed by continued growth in 2020 reaching approximately 67.71 billion US dollars.
- Invested capital
- Invested capital shows a steady increase over the period analyzed. Starting from roughly 14.34 billion US dollars in 2015, there is a consistent upward trend through each year, culminating in approximately 20.88 billion US dollars in 2020. The growth appears stable without any notable volatility.
- Market value added (MVA)
- The Market Value Added, calculated as the difference between market value and invested capital, illustrates strong growth overall but with some variability. The value started at about 22.31 billion US dollars in 2015, marginally declining in 2016, then increasing again in 2017. A decrease was observed in 2018 before a substantial surge in 2019, which continued robustly into 2020, reaching around 46.82 billion US dollars. This indicates enhanced value creation by the company over this timeframe.
In summary, the company exhibited solid growth in market valuation and invested capital over the six-year span. The significant rise in market value starting in 2019, along with the strong increase in market value added, suggests improved market confidence and efficient capital utilization in recent years.
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MVA Spread Ratio
Air Products & Chemicals Inc., MVA spread ratio calculation, comparison to benchmarks
| Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Market value added (MVA)1 | 46,823,249) | 38,589,812) | 22,081,103) | 23,516,105) | 21,921,396) | 22,307,744) | |
| Invested capital2 | 20,884,500) | 16,921,739) | 16,696,916) | 15,661,095) | 15,185,876) | 14,344,261) | |
| Performance Ratio | |||||||
| MVA spread ratio3 | 224.20% | 228.05% | 132.25% | 150.16% | 144.35% | 155.52% | |
| Benchmarks | |||||||
| MVA Spread Ratio, Competitors4 | |||||||
| Linde plc | — | — | — | — | — | — | |
| Sherwin-Williams Co. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30).
1 MVA. See details »
2 Invested capital. See details »
3 2020 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 46,823,249 ÷ 20,884,500 = 224.20%
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added shows a fluctuating but overall increasing trend from 2015 to 2020. Initially, the MVA decreased slightly from approximately $22.31 billion in 2015 to $21.92 billion in 2016, then increased moderately to about $23.52 billion in 2017. A decline occurred again in 2018, with MVA dropping to approximately $22.08 billion. However, a significant increase was observed in 2019, where the value rose sharply to around $38.59 billion, continuing this upward trajectory to reach approximately $46.82 billion in 2020.
- Invested Capital
- The invested capital exhibits a consistent upward trend over the entire period. It rose steadily from roughly $14.34 billion in 2015 to $15.19 billion in 2016, continuing to increase to approximately $15.66 billion in 2017 and further to about $16.70 billion in 2018. This positive trajectory persisted through 2019, reaching around $16.92 billion, and culminated in a substantial increase to approximately $20.88 billion in 2020. This steady growth indicates ongoing investment or asset accumulation during the period.
- MVA Spread Ratio
- The MVA spread ratio, expressed as a percentage, generally reflects the efficiency and value creation relative to invested capital. Starting at 155.52% in 2015, the ratio decreased to 144.35% in 2016, then recovered to 150.16% in 2017, before declining again to 132.25% in 2018. A marked improvement is noted in 2019, with the spread ratio increasing substantially to 228.05%, which slightly decreased but remained high at 224.2% in 2020. These changes suggest improved value creation and potentially better market conditions or operational performance in the latter years, especially from 2019 onwards.
- Overall Analysis
- The data indicates that despite some fluctuations in market value added and the spread ratio in the early years, the company experienced significant growth in both market value added and invested capital by 2020. The large increases from 2018 to 2020 highlight a period of enhanced value creation and capital investment. The strong rise in the MVA spread ratio during the last two years suggests improved efficiency in converting invested capital into market value. This trend may reflect strategic advancements, greater market confidence, or operational improvements during that period.
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MVA Margin
Air Products & Chemicals Inc., MVA margin calculation, comparison to benchmarks
| Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Market value added (MVA)1 | 46,823,249) | 38,589,812) | 22,081,103) | 23,516,105) | 21,921,396) | 22,307,744) | |
| Sales | 8,856,300) | 8,918,900) | 8,930,200) | 8,187,600) | 9,524,400) | 9,894,900) | |
| Performance Ratio | |||||||
| MVA margin2 | 528.70% | 432.67% | 247.26% | 287.22% | 230.16% | 225.45% | |
| Benchmarks | |||||||
| MVA Margin, Competitors3 | |||||||
| Linde plc | — | — | — | — | — | — | |
| Sherwin-Williams Co. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30).
1 MVA. See details »
2 2020 Calculation
MVA margin = 100 × MVA ÷ Sales
= 100 × 46,823,249 ÷ 8,856,300 = 528.70%
3 Click competitor name to see calculations.
The financial data reveals several notable trends over the six-year period ending September 30, 2020.
- Market value added (MVA)
- The MVA experienced fluctuations throughout the period. Starting at approximately 22.3 billion US dollars in 2015, it saw a slight decline in 2016, followed by an increase in 2017. In 2018, the MVA decreased again before a significant surge in 2019 and continuing upward momentum in 2020, reaching approximately 46.8 billion US dollars. This overall pattern indicates a strong recovery and growth in market value during the latter years.
- Sales
- Sales showed a downward trend from 2015 to 2017, falling from roughly 9.9 billion US dollars to about 8.2 billion US dollars. In 2018, there was a modest recovery to nearly 8.9 billion, but sales remained relatively flat in 2019 and 2020, with figures close to 8.9 billion and 8.9 billion respectively. The sales data suggest that revenue did not grow significantly over this period and even declined in the initial years.
- MVA Margin
- The MVA margin, expressed as a percentage, showed a generally increasing trend with some volatility. After a minor increase from about 225.45% in 2015 to 230.16% in 2016, there was a sharp rise to 287.22% in 2017. Despite a decline to 247.26% in 2018, the margin sharply increased in 2019 to 432.67% and further to 528.7% in 2020. This significant increase, particularly in the last two years, illustrates an improved efficiency or effectiveness in generating market value relative to sales.
In summary, the company experienced a declining trend in sales during the early years with stabilization in recent years, while the market value added showed strong growth especially from 2019 onwards. The MVA margin increased substantially over the period, suggesting that the company enhanced its ability to create market value relative to its sales despite relatively flat sales growth. This pattern may reflect improved profitability, operational efficiency, or positive market perceptions impacting the company's valuation.
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