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
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 »
The financial trajectory from 2020 to 2024 reveals a significant erosion of shareholder value creation as measured by Market Value Added (MVA). While the period initially showed strong value appreciation, the final year concludes with a negative MVA, indicating that the market valuation of the entity has fallen below the total capital invested.
- Market Fair Value Trends
- The market valuation reached a peak of 195,682 million USD in 2021. Following this peak, a consistent and sustained decline was observed over the subsequent three years, with the valuation dropping to 156,775 million USD in 2022, 146,028 million USD in 2023, and ultimately reaching 126,029 million USD by December 31, 2024.
- Invested Capital Analysis
- Invested capital has remained relatively stable throughout the analyzed period, fluctuating moderately between a high of 136,669 million USD in 2020 and a low of 123,703 million USD in 2022. The relative constancy of the capital base suggests that the decline in MVA is driven by the contraction of market value rather than significant changes in the underlying investment of capital.
- Market Value Added (MVA) Performance
- The MVA experienced a sharp increase to 64,800 million USD in 2021, marking the highest point of value creation in the period. However, a steep downward trend followed, with MVA falling to 33,072 million USD in 2022 and 11,334 million USD in 2023. In 2024, the MVA transitioned into negative territory, reaching -5,613 million USD. This negative figure signifies that the company's current market value is insufficient to cover the cost of the capital invested in the business.
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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 | (5,613) | 11,334) | 33,072) | 64,800) | 28,656) | |
| Invested capital2 | 131,642) | 134,694) | 123,703) | 130,882) | 136,669) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | -4.26% | 8.41% | 26.73% | 49.51% | 20.97% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Abbott Laboratories | 313.44% | 257.59% | 230.60% | 266.78% | — | |
| Elevance Health Inc. | 51.49% | 105.63% | 108.49% | 116.25% | — | |
| Intuitive Surgical Inc. | 2,431.18% | 1,699.53% | 1,400.02% | 2,002.36% | — | |
| Medtronic PLC | 74.24% | 88.43% | 93.80% | 163.10% | — | |
| UnitedHealth Group Inc. | 159.51% | 192.81% | 214.27% | 265.59% | — | |
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 × -5,613 ÷ 131,642 = -4.26%
4 Click competitor name to see calculations.
The financial trajectory from 2020 to 2024 indicates a significant erosion of market value creation relative to the capital invested in the business. While the period began with a strong upward trend in value added, the subsequent years were characterized by a consistent and severe decline, culminating in a negative valuation by the end of 2024.
- Market Value Added (MVA)
- A substantial increase in MVA was observed between 2020 and 2021, with values rising from US$ 28,656 million to a peak of US$ 64,800 million. This growth was followed by a precipitous three-year decline, falling to US$ 33,072 million in 2022 and US$ 11,334 million in 2023. By December 31, 2024, the MVA transitioned into negative territory, reaching -US$ 5,613 million.
- Invested Capital
- Invested capital exhibited relative stability over the analyzed period. The figures fluctuated moderately, starting at US$ 136,669 million in 2020, dipping to a low of US$ 123,703 million in 2022, and recovering to US$ 134,694 million in 2023 before ending at US$ 131,642 million in 2024. The lack of extreme volatility in invested capital suggests that the fluctuations in MVA were driven by changes in market perception and valuation rather than significant shifts in the internal capital base.
- MVA Spread Ratio
- The MVA spread ratio closely mirrored the trend of the MVA, peaking at 49.51% in 2021. A sharp downward trend is observed thereafter, with the ratio contracting to 26.73% in 2022 and further collapsing to 8.41% in 2023. The ratio concluded the period at -4.26% in 2024, signifying that the market value of the firm fell below the total amount of capital invested.
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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 | (5,613) | 11,334) | 33,072) | 64,800) | 28,656) | |
| Revenues from customers | 370,656) | 356,623) | 321,629) | 290,912) | 267,908) | |
| Performance Ratio | ||||||
| MVA margin2 | -1.51% | 3.18% | 10.28% | 22.27% | 10.70% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Abbott Laboratories | 448.94% | 383.09% | 323.76% | 384.46% | — | |
| Elevance Health Inc. | 22.99% | 43.23% | 46.56% | 54.23% | — | |
| Intuitive Surgical Inc. | 2,261.68% | 1,695.34% | 1,209.45% | 1,575.51% | — | |
| Medtronic PLC | 157.30% | 199.61% | 205.92% | 391.27% | — | |
| UnitedHealth Group Inc. | 80.18% | 95.85% | 109.81% | 130.39% | — | |
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 × -5,613 ÷ 370,656 = -1.51%
3 Click competitor name to see calculations.
A significant divergence is observed between the company's revenue growth and its market value added (MVA) over the five-year period from 2020 to 2024. While top-line growth remained consistent, the market's valuation of the value added relative to invested capital experienced a severe decline, eventually turning negative.
- Market Value Added (MVA) Trend
- The MVA exhibited extreme volatility, peaking in 2021 at 64,800 million US dollars before entering a steep downward trajectory. Following the 2021 peak, the value decreased by approximately 49% in 2022 and continued to fall to 11,334 million US dollars by 2023. By December 31, 2024, the MVA became negative, reaching -5,613 million US dollars, indicating that the market value of the company fell below the total capital invested.
- Revenue Performance
- In contrast to the MVA, revenues from customers demonstrated steady and uninterrupted annual growth. Revenues increased from 267,908 million US dollars in 2020 to 370,656 million US dollars in 2024. This represents a consistent expansion of the company's operational scale over the analyzed period.
- MVA Margin Analysis
- The MVA margin, which relates the market value added to total revenues, mirrors the trend of the absolute MVA. The margin peaked at 22.27% in 2021, coinciding with the highest recorded MVA. Subsequently, the margin collapsed to 10.28% in 2022 and 3.18% in 2023, ultimately ending at -1.51% in 2024. This contraction suggests that despite the increase in total revenues, the company failed to translate this growth into increased market value, resulting in a deterioration of the value-creation efficiency as perceived by the market.
The data indicates a transition from a high-value-creation phase in 2021 to a value-destruction phase by 2024. The persistent growth in revenue was insufficient to offset the factors driving the decline in market valuation, leading to a negative MVA margin by the end of the period.
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