.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
Caterpillar Inc., MVA calculation
USD $ in millions
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| | Fair value of Debt1 | |||||
| | PV of operating lease payments2 | |||||
| | Market value of common equity | |||||
| | Noncontrolling interests | |||||
| | Less: Available-for-sale securities | |||||
| | Market (fair) value of Caterpillar | |||||
| | Less: Invested capital3 | |||||
| | MVA |
Source: Based on data from Caterpillar Inc. 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 | Caterpillar's market (fair) value less invested capital. | Caterpillar Inc.'s MVA increased from 2015 to 2016 and from 2016 to 2017. |
MVA Spread
Caterpillar Inc., 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 | |||||
| | Invested capital2 | |||||
| Ratio | ||||||
| | MVA spread3 | % | % | % | % | % |
Source: Based on data from Caterpillar Inc. Annual Reports
2017 Calculations
1 MVA. See Details »
2 Invested capital. See Details »
3 MVA spread = 100 × MVA ÷ Invested capital
= 100 × ÷ = %
| 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. | Caterpillar Inc.'s MVA spread improved from 2015 to 2016 and from 2016 to 2017. |
MVA Margin
Caterpillar Inc., 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 | |||||
| | Sales of Machinery, Energy & Transportation | |||||
| Ratio | ||||||
| | MVA margin2 | % | % | % | % | % |
Source: Based on data from Caterpillar Inc. Annual Reports
2017 Calculations
1 MVA. See Details »
2 MVA margin = 100 × MVA ÷ Sales of Machinery, Energy & Transportation
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| MVA margin | The ratio of MVA to sales. It measures how efficiently and prodigiously sales translate into franchise value. | Caterpillar Inc.'s MVA margin improved from 2015 to 2016 and from 2016 to 2017. |
