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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Albemarle Corp. pages available for free this week:
- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
- Price to Sales (P/S) since 2005
- Aggregate Accruals
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MVA
Albemarle Corp., MVA calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-12-31), 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).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of Albemarle
- The market value of the company demonstrated a consistent upward trend over the five-year period. Starting at approximately 11.76 billion US dollars in 2018, the value increased modestly by 2019. A significant jump was observed in 2020, with the market value nearly doubling compared to 2019. This positive momentum continued through 2021 and 2022, culminating in a market value exceeding 35 billion US dollars in the last recorded year. This pattern indicates strong market confidence and enhanced valuation during the timeframe.
- Invested capital
- Invested capital exhibited fluctuations with an overall growth trajectory. Beginning at approximately 5.43 billion US dollars in 2018, invested capital rose substantially to around 6.90 billion in 2019 and further to approximately 7.38 billion in 2020. However, there was a notable decline in 2021, dropping to about 6.79 billion US dollars. The downward adjustment was followed by a sharp increase in 2022, with invested capital reaching a peak of roughly 10.05 billion US dollars. This volatility suggests strategic adjustments in capital deployment, reflecting the company's reactions to market conditions or internal investment decisions.
- Market value added (MVA)
- Market value added closely mirrors the trends seen in the market value but also reflects changes relative to invested capital. Starting at around 6.33 billion US dollars in 2018, MVA decreased slightly in 2019, indicating a slower growth in market value compared to invested capital during that year. A substantial increase appeared in 2020, with MVA more than doubling to approximately 14.92 billion US dollars. This upward trend continued robustly into 2021 and 2022, peaking at nearly 25.0 billion US dollars. The rising MVA over the years highlights an enhanced ability of the company to generate market value beyond the capital invested, signaling improved value creation for stakeholders.
MVA Spread Ratio
Albemarle Corp., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Linde plc | ||||||
| Sherwin-Williams Co. | ||||||
Based on: 10-K (reporting date: 2022-12-31), 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).
1 MVA. See details »
2 Invested capital. See details »
3 2022 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added exhibited a significant upward trend over the five-year period. Starting at approximately 6.33 billion USD at the end of 2018, it experienced a slight decline in 2019 to around 5.64 billion USD. Subsequently, the MVA increased dramatically each year, reaching roughly 25 billion USD by the end of 2022. This reflects a strong creation of shareholder value, particularly notable after 2019.
- Invested Capital
- The invested capital showed moderate fluctuations throughout the period. After an initial increase from about 5.43 billion USD in 2018 to 6.90 billion USD in 2019, the invested capital experienced a small rise in 2020 to approximately 7.38 billion USD. However, it decreased somewhat in 2021 to roughly 6.79 billion USD before increasing substantially to over 10 billion USD by the end of 2022. This pattern suggests a period of cautious capital investment followed by a more aggressive capital deployment in 2022.
- MVA Spread Ratio
- The MVA spread ratio, an indicator of how effectively invested capital is generating market value, demonstrated notable volatility. Beginning at 116.5% in 2018, it decreased sharply to 81.66% in 2019, indicating a decline in relative value creation that year. The ratio rebounded strongly in 2020, more than doubling to 202.02%, and continued to improve in 2021 to 269.58%, suggesting significant gains in value generation efficiency. In 2022, there was a slight decline to 248.24%, though the ratio remained exceptionally high compared to earlier years.
- Overall Insights
- The data reflects a period of dynamic value creation with some fluctuations. Despite an initial dip in market value added and the MVA spread ratio in 2019, subsequent years showed strong recovery and growth, culminating in considerable increases in both market value added and capital efficiency by 2022. The substantial increase in invested capital in the final year indicates a strategic expansion or reinvestment phase. The sustained high levels of the MVA spread ratio in 2020 through 2022 suggest that capital deployment during this period was effective in enhancing market value.
MVA Margin
Albemarle Corp., MVA margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Net sales | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Linde plc | ||||||
| Sherwin-Williams Co. | ||||||
Based on: 10-K (reporting date: 2022-12-31), 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).
1 MVA. See details »
2 2022 Calculation
MVA margin = 100 × MVA ÷ Net sales
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added demonstrates an overall upward trend from 2018 to 2022. Starting at approximately 6.33 billion US dollars in 2018, it slightly decreased in 2019 to about 5.64 billion. However, from 2019 onwards, it exhibited a significant increase, reaching approximately 14.92 billion in 2020, 18.31 billion in 2021, and peaking at roughly 24.95 billion by the end of 2022. This progression indicates an enhanced value creation for shareholders over the five-year period, particularly strong after 2019.
- Net Sales
- Net sales experienced moderate fluctuations between 2018 and 2021, starting at roughly 3.37 billion US dollars in 2018, with a slight rise to about 3.59 billion in 2019, followed by a decrease to approximately 3.13 billion in 2020. Sales rebounded somewhat in 2021 to nearly 3.33 billion. Notably, 2022 marks a substantial increase in net sales, more than doubling to about 7.32 billion US dollars. This surge suggests a major growth in revenue-generating activity during the last year observed.
- MVA Margin
- The MVA margin, expressed as a percentage, shows variability aligned with movements in both market value added and net sales. Initially, the margin was strong at 187.54% in 2018, but declined to 156.99% in 2019. It then experienced a remarkable increase to 476.73% in 2020 and further to 550.19% in 2021, suggesting improved efficiency or enhanced value added relative to sales in these years. However, the margin decreased to 340.9% in 2022, which despite being lower than in 2021, remains significantly higher than the levels seen in 2018 and 2019, indicating sustained improved performance compared to the earlier period.