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
Becton, Dickinson & Co., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2021-09-30), 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).
1 Fair value of debt. See details »
2 Invested capital. See details »
The analysis of Market Value Added (MVA) from 2016 to 2021 indicates a period of significant value creation followed by a phase of volatility and stabilization. The MVA remained positive throughout the entire period, signifying that the market valuation of the entity consistently exceeded the capital invested by shareholders and creditors.
- Market Value Trends
- A strong upward trajectory in fair market value was observed between 2016 and 2019, with the valuation rising from US$ 48,294 million to a peak of US$ 91,399 million. This growth represents a substantial increase in investor confidence and perceived future earning potential. A correction occurred in 2020, where the market value declined to US$ 86,074 million, before experiencing a modest recovery to US$ 88,932 million by September 30, 2021.
- Invested Capital Dynamics
- Invested capital experienced rapid expansion during the first three years of the period, increasing from US$ 22,258 million in 2016 to US$ 47,282 million in 2018. Following this period of aggressive capital deployment, the investment levels stabilized, fluctuating narrowly between US$ 45,181 million and US$ 46,312 million from 2019 through 2021. This suggests a transition from a growth-oriented capital expenditure phase to a more sustainable maintenance or optimization phase.
- Market Value Added (MVA) Performance
- The MVA exhibited a consistent growth pattern from 2016 to 2019, climbing from US$ 26,036 million to a peak of US$ 46,218 million. This indicates that the company was generating market value at a rate significantly faster than the rate of capital infusion. A notable contraction occurred in 2020, with MVA dropping to US$ 39,762 million, primarily driven by the decline in total market value rather than a reduction in invested capital. By 2021, the MVA recovered to US$ 43,654 million, demonstrating resilience in value creation despite the preceding volatility.
Overall, the data reveals that the entity successfully converted invested capital into significantly higher market wealth. The most aggressive value creation occurred between 2016 and 2019, while the subsequent years characterize a period of valuation adjustment and stabilization of the capital base.
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MVA Spread Ratio
Becton, Dickinson & Co., MVA spread ratio calculation, comparison to benchmarks
| Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Market value added (MVA)1 | 43,654) | 39,762) | 46,218) | 39,501) | 36,105) | 26,036) | |
| Invested capital2 | 45,278) | 46,312) | 45,181) | 47,282) | 34,655) | 22,258) | |
| Performance Ratio | |||||||
| MVA spread ratio3 | 96.41% | 85.86% | 102.29% | 83.54% | 104.18% | 116.97% | |
| Benchmarks | |||||||
| MVA Spread Ratio, Competitors4 | |||||||
| Abbott Laboratories | 266.78% | — | — | — | — | — | |
| Elevance Health Inc. | 116.25% | — | — | — | — | — | |
| Intuitive Surgical Inc. | 2,002.36% | — | — | — | — | — | |
| Medtronic PLC | 163.10% | — | — | — | — | — | |
| UnitedHealth Group Inc. | 265.59% | — | — | — | — | — | |
Based on: 10-K (reporting date: 2021-09-30), 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).
1 MVA. See details »
2 Invested capital. See details »
3 2021 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 43,654 ÷ 45,278 = 96.41%
4 Click competitor name to see calculations.
The overall financial trajectory between 2016 and 2021 indicates a substantial increase in absolute market value creation alongside a significant expansion of the capital base, though the efficiency of this value creation remained volatile.
- Market Value Added (MVA)
- MVA demonstrated a strong upward trend from 2016 to 2019, rising from 26,036 million USD to a peak of 46,218 million USD. A contraction occurred in 2020 to 39,762 million USD, followed by a recovery to 43,654 million USD by September 30, 2021. This progression suggests a general increase in the premium the market assigns to the organization over its invested capital, despite a temporary decline in 2020.
- Invested Capital
- Invested capital experienced rapid growth in the early part of the observed period, increasing from 22,258 million USD in 2016 to 47,282 million USD by 2018. Following this expansion, the capital base stabilized, fluctuating within a narrow range between approximately 45,181 million USD and 46,312 million USD through 2021. This indicates a transition from an aggressive capital deployment phase to a period of operational stabilization.
- MVA Spread Ratio
- The MVA spread ratio exhibited notable volatility, starting at a peak of 116.97% in 2016 and declining to a low of 83.54% in 2018. This decline coincided with the period of most rapid capital expansion, suggesting that the growth in invested capital outpaced the growth in market value added during those years. A recovery to 102.29% occurred in 2019, followed by a subsequent dip to 85.86% in 2020 and a final increase to 96.41% in 2021. These fluctuations reflect shifting market perceptions regarding the company's capacity to generate value relative to the capital employed.
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MVA Margin
Becton, Dickinson & Co., MVA margin calculation, comparison to benchmarks
| Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Market value added (MVA)1 | 43,654) | 39,762) | 46,218) | 39,501) | 36,105) | 26,036) | |
| Revenues | 20,248) | 17,117) | 17,290) | 15,983) | 12,093) | 12,483) | |
| Performance Ratio | |||||||
| MVA margin2 | 215.60% | 232.30% | 267.31% | 247.14% | 298.56% | 208.57% | |
| Benchmarks | |||||||
| MVA Margin, Competitors3 | |||||||
| Abbott Laboratories | 384.46% | — | — | — | — | — | |
| Elevance Health Inc. | 54.23% | — | — | — | — | — | |
| Intuitive Surgical Inc. | 1,575.51% | — | — | — | — | — | |
| Medtronic PLC | 391.27% | — | — | — | — | — | |
| UnitedHealth Group Inc. | 130.39% | — | — | — | — | — | |
Based on: 10-K (reporting date: 2021-09-30), 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).
1 MVA. See details »
2 2021 Calculation
MVA margin = 100 × MVA ÷ Revenues
= 100 × 43,654 ÷ 20,248 = 215.60%
3 Click competitor name to see calculations.
Between the fiscal years 2016 and 2021, a general expansion in both absolute market value added and top-line revenues is observed, although the relationship between the two—expressed as the MVA margin—demonstrated significant fluctuation and an eventual decline.
- Market Value Added (MVA) Trends
- Absolute MVA grew steadily from 26,036 million US$ in 2016 to a peak of 46,218 million US$ in 2019. A contraction occurred in 2020, where the value decreased to 39,762 million US$, followed by a recovery to 43,654 million US$ in 2021. This indicates a general upward trajectory in the market's valuation of the company's wealth creation over the six-year period, despite a temporary dip.
- Revenue Growth Patterns
- Revenues exhibited a strong overall increase, rising from 12,483 million US$ in 2016 to 20,248 million US$ in 2021. Notable accelerations in revenue growth were recorded in 2018 and 2021, signaling a consistent expansion of the company's operational scale and market reach.
- MVA Margin Analysis
- The MVA margin showed a volatile pattern, reaching a peak of 298.56% in 2017 before trending downward to 215.60% by 2021. Because the margin declined while absolute MVA and revenues generally increased, it is evident that revenue growth outpaced the growth of the market value premium. This compression suggests that the market's valuation of the company per unit of revenue has diminished over time, despite the overall growth in corporate value.
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