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
Boston Scientific Corp., MVA calculation
US$ in millions
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 »
Between December 31, 2018, and December 31, 2022, a general upward trajectory in shareholder value creation is observed, as evidenced by the growth in Market Value Added (MVA). While there was a period of slight contraction in value creation between 2018 and 2020, a strong recovery occurred in the subsequent two years, culminating in a five-year peak by the end of 2022.
- Market Value Trends
- The fair market value grew from US$ 62,791 million in 2018 to US$ 76,304 million by the end of 2022. This represents a consistent overall increase, with the most significant gains occurring between 2020 and 2022.
- Invested Capital Growth
- Invested capital exhibited a steady increase over the analyzed period, rising from US$ 16,047 million in 2018 to US$ 22,868 million in 2022. The most substantial increase occurred between 2018 and 2019, marking a significant expansion of the capital base.
- Market Value Added (MVA) Dynamics
- MVA remained relatively stagnant from 2018 to 2020, declining from US$ 46,744 million to US$ 45,107 million. This suggests that during this interval, the growth in market value did not keep pace with the increase in invested capital. However, a reversal occurred in 2021 and 2022, with MVA rising to US$ 50,980 million and US$ 53,436 million, respectively. This upward shift indicates that the market began to value the company significantly higher than the capital invested, signaling enhanced efficiency in value creation during the final two years of the period.
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MVA Spread Ratio
Boston Scientific 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 millions) | ||||||
| Market value added (MVA)1 | 53,436) | 50,980) | 45,107) | 46,696) | 46,744) | |
| Invested capital2 | 22,868) | 22,038) | 21,053) | 20,389) | 16,047) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 233.67% | 231.33% | 214.26% | 229.03% | 291.30% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Abbott Laboratories | 230.60% | 266.78% | — | — | — | |
| Elevance Health Inc. | 108.49% | 116.25% | — | — | — | |
| Intuitive Surgical Inc. | 1,400.02% | 2,002.36% | — | — | — | |
| Medtronic PLC | 93.80% | 163.10% | — | — | — | |
| UnitedHealth Group Inc. | 214.27% | 265.59% | — | — | — | |
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 × 53,436 ÷ 22,868 = 233.67%
4 Click competitor name to see calculations.
The financial trajectory from 2018 to 2022 reflects a period of consistent capital expansion coupled with fluctuating market valuation premiums. While invested capital grew steadily throughout the five-year period, the market value added experienced a temporary contraction before entering a strong growth phase in the final two years.
- Market Value Added (MVA)
- MVA demonstrated a slight downward trend in the initial period, declining from US$ 46,744 million in 2018 to US$ 45,107 million in 2020. This trend reversed significantly starting in 2021, with MVA increasing to US$ 50,980 million and further climbing to US$ 53,436 million by December 31, 2022, indicating an increase in the premium the market assigns to the company over its invested capital.
- Invested Capital
- A sustained upward trend is observed in invested capital, which grew from US$ 16,047 million in 2018 to US$ 22,868 million in 2022. This consistent growth suggests a continuous commitment to expanding the asset base and operational capacity.
- MVA Spread Ratio
- The MVA spread ratio experienced a sharp contraction between 2018 and 2020, falling from 291.30% to 214.26%. This decline was primarily the result of invested capital increasing at a faster rate than the market value added. However, a recovery phase began in 2021, with the ratio rising to 231.33% and reaching 233.67% by the end of 2022, signaling that market valuation began to outpace capital expansion once again.
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MVA Margin
Boston Scientific 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 millions) | ||||||
| Market value added (MVA)1 | 53,436) | 50,980) | 45,107) | 46,696) | 46,744) | |
| Net sales | 12,682) | 11,888) | 9,913) | 10,735) | 9,823) | |
| Add: Increase (decrease) in deferred revenue | 25) | 89) | (5) | 27) | —) | |
| Adjusted net sales | 12,707) | 11,977) | 9,908) | 10,762) | 9,823) | |
| Performance Ratio | ||||||
| MVA margin2 | 420.52% | 425.65% | 455.26% | 433.90% | 475.87% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Abbott Laboratories | 323.76% | 384.46% | — | — | — | |
| Elevance Health Inc. | 46.56% | 54.23% | — | — | — | |
| Intuitive Surgical Inc. | 1,209.45% | 1,575.51% | — | — | — | |
| Medtronic PLC | 205.92% | 391.27% | — | — | — | |
| UnitedHealth Group Inc. | 109.81% | 130.39% | — | — | — | |
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 ÷ Adjusted net sales
= 100 × 53,436 ÷ 12,707 = 420.52%
3 Click competitor name to see calculations.
The financial performance between 2018 and 2022 exhibits a divergent trend between the absolute growth of market value added and the efficiency of the market value added margin. While the total market value added reached its highest point by the end of the period, the margin relative to adjusted net sales experienced a general decline.
- Market Value Added (MVA)
- A period of relative stability was observed between 2018 and 2020, with values fluctuating slightly between 46,744 million and 45,107 million. Following 2020, a strong upward trajectory emerged, with MVA increasing to 50,980 million in 2021 and peaking at 53,436 million in 2022. This indicates an increase in the market's valuation of the company over and above its invested capital during the latter two years of the analysis.
- Adjusted Net Sales
- Adjusted net sales demonstrated volatility with a notable dip in 2020, falling to 9,908 million from 10,762 million in 2019. However, a robust recovery followed, with sales growing significantly to 11,977 million in 2021 and reaching 12,707 million by 2022. The growth in sales from 2020 to 2022 reflects an expansion in operational scale.
- MVA Margin
- The MVA margin shows a general downward trend over the five-year period, decreasing from a peak of 475.87% in 2018 to 420.52% in 2022. Although there was a temporary recovery in 2020 to 455.26%, the margin declined in the subsequent two years. This contraction suggests that while the absolute market value added grew, it did not increase at a rate proportional to the growth in adjusted net sales, leading to a reduction in the MVA margin.
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