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 analysis of market value added (MVA) for Air Products & Chemicals Inc. between 2015 and 2020 reveals a significant expansion in shareholder value creation, particularly in the latter two years of the period.
- Market Value Trends
- The market value remained relatively stable between 2015 and 2018, fluctuating within a range of approximately US$ 36.6 billion to US$ 39.2 billion. However, a substantial upward trajectory began in 2019, with the value increasing to US$ 55.5 billion, and further accelerating to US$ 67.7 billion by September 30, 2020. This represents a growth of approximately 84.7% in market capitalization over the six-year period.
- Invested Capital Trends
- Invested capital exhibited a consistent and steady increase throughout the analyzed timeframe. Starting at US$ 14.3 billion in 2015, the capital base grew incrementally each year, reaching US$ 16.9 billion in 2019 before a more pronounced increase to US$ 20.9 billion in 2020. The growth in invested capital was linear and stable compared to the more volatile movements in market valuation.
- Market Value Added (MVA) Performance
- MVA remained consistent during the first four years, oscillating between US$ 21.9 billion and US$ 23.5 billion. A pivotal shift occurred in 2019, where MVA rose sharply to US$ 38.6 billion, and continued to climb to US$ 46.8 billion in 2020. The divergence between the growth rate of market value and the growth rate of invested capital indicates that the market began pricing in significantly higher future earnings potential or strategic value beyond the physical and financial capital deployed.
Overall, the data demonstrates that while the company steadily increased its invested capital, the market's perception of the firm's value grew at a disproportionately faster rate starting in 2019, resulting in a substantial increase in total value added for shareholders.
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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.
Between September 30, 2015, and September 30, 2020, a significant acceleration in value creation is observed, characterized by a substantial divergence between the growth of invested capital and market value added starting in 2019.
- Market Value Added (MVA)
- MVA remained relatively stable from 2015 to 2018, fluctuating within a narrow range between US$ 21.9 billion and US$ 23.5 billion. A sharp upward trajectory began in 2019, with value increasing to US$ 38.6 billion, and further climbing to US$ 46.8 billion by September 30, 2020. This represents a total increase of approximately 110% over the analyzed period.
- Invested Capital
- Invested capital exhibited consistent growth throughout the period. Starting at US$ 14.3 billion in 2015, the capital base grew steadily to US$ 16.9 billion by 2019, followed by a more pronounced increase to US$ 20.9 billion in 2020. The growth in invested capital was linear and steady compared to the more volatile and aggressive growth seen in MVA.
- MVA Spread Ratio
- The MVA spread ratio experienced a period of moderate decline and fluctuation between 2015 and 2018, moving from 155.52% to a low of 132.25%. A significant inflection point occurred in 2019, where the ratio surged to 228.05% and remained elevated at 224.20% in 2020. This shift indicates that the market valuation of the entity grew at a rate far exceeding the growth of the capital invested, suggesting a substantial increase in the efficiency of value creation from an investor perspective.
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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.
Between 2015 and 2020, a pronounced divergence occurred between operational revenue and market valuation. While sales figures remained relatively stagnant or experienced slight contractions, the market value added grew exponentially, particularly in the latter portion of the analyzed period.
- Market Value Added (MVA) Trends
- MVA remained relatively stable from 2015 to 2018, fluctuating between 21.9 billion and 23.5 billion US dollars. A significant upward shift began in 2019, with the value rising to 38.6 billion US dollars, and continuing to 46.8 billion US dollars by September 30, 2020. This represents a substantial increase in the market's valuation of the entity relative to its invested capital.
- Sales Performance
- Annual sales exhibited a general downward or flat trend. From a high of 9.89 billion US dollars in 2015, revenue dipped to 8.19 billion US dollars in 2017. Although there was a slight recovery in 2018, sales plateaued around 8.8 to 8.9 billion US dollars through 2020, indicating that growth in market value was not driven by an increase in top-line revenue.
- MVA Margin Analysis
- The MVA margin grew steadily from 225.45% in 2015 to 528.70% in 2020. A critical acceleration is observed between 2018 and 2020, where the margin shifted from 247.26% to 528.70%. This expansion demonstrates that the company's market value increased at a rate far exceeding its sales growth, suggesting that investors attributed higher future value to the company despite static operational turnover.
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