Market Value Added (MVA)

Difficulty: Advanced

Market value added (MVA) is the difference between a firms's 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

CVS Health Corp., MVA calculation

USD $ in millions

 
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Fair value of Debt1 28,076  28,374  28,400  13,985  14,200 
PV of operating lease payments2 16,275  16,201  16,217  14,980  14,992 
Market value of common equity 70,804  79,297  99,424  114,416  81,316 
Preferred stock, par value $0.01; none issued or outstanding
Redeemable noncontrolling interest 39 
Noncontrolling interest
Less: Investments 111  87  88  85  88 
Market (fair) value of CVS Health 115,048  123,789  143,999  143,301  110,419 
Less: Invested capital3 84,329  85,284  85,571  69,298  69,625 
MVA 30,719  38,505  58,428  74,003  40,795 

Source: Based on data from CVS Health Corp. Annual Reports

1 Fair value of debt. See Details »

2 Present value of operating lease payments. See Details »

3 Invested capital. See Details »

Item Description The company
MVA CVS Health's market (fair) value less invested capital. CVS Health Corp.'s MVA declined from 2015 to 2016 and from 2016 to 2017.

Top


MVA Spread

CVS Health Corp., MVA spread calculation

 
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Market value added (MVA)1 30,719  38,505  58,428  74,003  40,795 
Invested capital2 84,329  85,284  85,571  69,298  69,625 
Ratio
MVA spread3 36.43% 45.15% 68.28% 106.79% 58.59%

Source: Based on data from CVS Health Corp. Annual Reports

2017 Calculations

1 MVA. See Details »

2 Invested capital. See Details »

3 MVA spread = 100 × MVA ÷ Invested capital
= 100 × 30,719 ÷ 84,329 = 36.43%

Ratio Description The company
MVA spread The ratio of MVA to invested capital. It measures the efficiency with which investors' capital investment has translated into a franchise value and into an aggregate net present value premium. CVS Health Corp.'s MVA spread deteriorated from 2015 to 2016 and from 2016 to 2017.

Top


MVA Margin

CVS Health Corp., MVA margin calculation

 
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Market value added (MVA)1 30,719  38,505  58,428  74,003  40,795 
Net revenues 184,765  177,526  153,290  139,367  126,761 
Ratio
MVA margin2 16.63% 21.69% 38.12% 53.10% 32.18%

Source: Based on data from CVS Health Corp. Annual Reports

2017 Calculations

1 MVA. See Details »

2 MVA margin = 100 × MVA ÷ Net revenues
= 100 × 30,719 ÷ 184,765 = 16.63%

Ratio Description The company
MVA margin The ratio of MVA to sales. It measures how efficiently and prodigiously sales translate into franchise value. CVS Health Corp.'s MVA margin deteriorated from 2015 to 2016 and from 2016 to 2017.

Top