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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- Balance Sheet: Assets
- Common-Size Income Statement
- Analysis of Profitability Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Capital Asset Pricing Model (CAPM)
- Operating Profit Margin since 2005
- Price to Sales (P/S) since 2005
- Aggregate Accruals
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MVA
CVS Health Corp., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of CVS Health
- The market value experienced an increase from 165,325 million USD in 2020 to a peak of 195,682 million USD in 2021. Following this peak, the market value demonstrated a consistent decline over the subsequent three years, dropping to 156,775 million USD in 2022, 146,028 million USD in 2023, and further down to 126,029 million USD by the end of 2024.
- Invested capital
- Invested capital showed a declining trend from 136,669 million USD in 2020 to 123,703 million USD in 2022. This decrease was interrupted in 2023, when invested capital increased to 134,694 million USD. However, by the end of 2024, a slight decrease was observed, with invested capital amounting to 131,642 million USD.
- Market value added (MVA)
- Market value added (MVA) follows a pattern similar to the market value but with more pronounced fluctuations. Starting at 28,656 million USD in 2020, the MVA increased significantly to 64,800 million USD in 2021, indicating substantial value creation. This was followed by a sharp decline to 33,072 million USD in 2022 and a further decrease to 11,334 million USD in 2023. By 2024, the MVA turned negative, reaching -5,613 million USD, which suggests that the market value fell below the invested capital in that year.
- Overall trends and insights
- Overall, the data reveals a peak in both market value and market value added in 2021, followed by a continuous downward trend through to 2024. Invested capital decreased initially but showed some recovery in 2023 before a minor dip in 2024. The negative MVA in 2024 points towards a decrease in investor confidence or a deterioration in perceived company value relative to the capital invested, suggesting potential challenges in value generation during the last period analyzed.
MVA Spread Ratio
CVS Health Corp., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Abbott Laboratories | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2024 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 significant fluctuations over the five-year period. It increased sharply from 28,656 million US dollars in 2020 to a peak of 64,800 million US dollars in 2021. Following this peak, there was a notable decline to 33,072 million in 2022 and a further decrease to 11,334 million in 2023. By 2024, MVA turned negative, reaching -5,613 million, indicating that the market value had fallen below the invested capital by that year.
- Invested Capital
- Invested capital displayed moderate variability across the years. It started at 136,669 million US dollars in 2020, decreased gradually to 123,703 million in 2022, then increased again to 134,694 million in 2023 before slightly declining to 131,642 million in 2024. Overall, the invested capital remained relatively stable with fluctuations within a limited range.
- MVA Spread Ratio
- The MVA spread ratio, representing the percentage value added on invested capital, followed a trend similar to that of market value added. The ratio peaked at 49.51% in 2021, indicating a high value creation relative to invested capital. After 2021, the ratio declined progressively, dropping sharply to 8.41% in 2023 and ultimately becoming negative at -4.26% in 2024. This transition reflects diminishing profitability and value creation relative to the capital invested during the analyzed period.
- Summary
- The data reveals a period of strong value creation and market confidence in 2021, as indicated by the peak in both MVA and MVA spread ratio. However, this was followed by a consistent deterioration in these metrics through 2024. Despite relatively stable invested capital amounts, the decline and eventual negativity in MVA and MVA spread imply challenges in generating returns above the cost of capital in the latter years. This trend suggests a weakening market perception of the firm’s value creation effectiveness.
MVA Margin
CVS Health Corp., MVA margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Revenues from customers | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Abbott Laboratories | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 MVA. See details »
2 2024 Calculation
MVA margin = 100 × MVA ÷ Revenues from customers
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added exhibited a notable fluctuation over the period analyzed. It increased significantly from 28,656 million USD in 2020 to a peak of 64,800 million USD in 2021. Following this spike, there was a marked decline over the subsequent years, dropping to 33,072 million USD in 2022, 11,334 million USD in 2023, and ultimately turning negative to -5,613 million USD in 2024. This trajectory indicates a loss in the market value added by the last year, suggesting deteriorating investor sentiment or diminished market expectations relative to the company's invested capital.
- Revenues from Customers
- The revenues from customers showed a consistent upward trend throughout the evaluated timeframe. Starting at 267,908 million USD in 2020, revenues increased steadily each year to reach 370,656 million USD by 2024. This reflects ongoing growth in the company’s core operations and an expanding revenue base over the five-year span.
- MVA Margin
- The MVA margin followed a pattern similar to the absolute MVA values, with an initial increase from 10.7% in 2020 to a peak of 22.27% in 2021. After this peak, the margin declined sharply to 10.28% in 2022 and continued to fall to 3.18% in 2023. By 2024, the margin became negative at -1.51%. This indicates that while revenues grew, the market value added relative to revenues decreased substantially, eventually becoming detrimental as reflected by the negative margin in 2024.
- Overall Insights
- There is a clear divergence between rising revenue levels and the declining market value added and MVA margin. This suggests that despite increased sales and revenue generation, the market’s perception of the company’s value creation diminished notably after 2021. The negative MVA and margin in 2024 imply potential concerns regarding profitability, capital efficiency, or future growth prospects that may have negatively impacted the company’s valuation.