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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- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Geographic Areas
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Current Ratio since 2005
- Analysis of Revenues
- Aggregate Accruals
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MVA
Chevron 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 Chevron
- The market value shows an overall increasing trend from 2020 through 2022, rising from $248,288 million to $334,892 million. However, a decline is observed in the subsequent years, decreasing to $312,371 million in 2023 and further to $305,175 million in 2024. This represents a peak in 2022 followed by a downward adjustment over the next two years.
- Invested capital
- The invested capital reflects some fluctuations over the period. Starting at $197,314 million in 2020, it decreases slightly to $193,606 million in 2021, then increases significantly to $212,342 million in 2022. The value remains virtually stable in 2023 at $212,337 million before experiencing a minor decline to $208,395 million in 2024. This suggests a period of increased capital deployment around 2022 with stabilization and slight contraction thereafter.
- Market value added (MVA)
- The MVA exhibits a strong upward trend from 2020 to 2022, more than doubling from $50,974 million in 2020 to $122,550 million in 2022. Following this peak, a marked decrease occurs over the next two years, with MVA falling to $100,034 million in 2023 and further to $96,780 million in 2024. Despite the decline, the MVA remains significantly higher than the initial 2020 level, indicating sustained value creation relative to invested capital over the entire period.
- Overall Insights
- The data indicate a phase of growth and value enhancement peaking around 2022, followed by a moderate downturn in market valuation and value added from 2023 onwards. Invested capital expansion aligns with the growth phase but stabilizes and contracts slightly as market metrics decline. The pattern suggests that while the company enhanced its capital base and market value significantly through 2022, subsequent market or operational factors led to diminished market perception and value creation, warranting further investigation into external or internal causes contributing to this trend reversal.
MVA Spread Ratio
Chevron Corp., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
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.
The financial data indicates the changes in market value added (MVA), invested capital, and MVA spread ratio over a five-year period.
- Market Value Added (MVA)
- MVA increased significantly from 50,974 million US$ in 2020 to a peak of 122,550 million US$ in 2022. However, following this peak, a decline is observed with MVA falling to 100,034 million US$ in 2023 and further decreasing to 96,780 million US$ in 2024.
- Invested Capital
- Invested capital started at 197,314 million US$ in 2020, showing a slight decrease to 193,606 million US$ in 2021. It then rose steadily to 212,342 million US$ in 2022 and remained relatively stable around 212,337 million US$ in 2023 before slightly declining to 208,395 million US$ in 2024.
- MVA Spread Ratio (%)
- The MVA spread ratio showed a rising trend from 25.83% in 2020 to 57.71% in 2022, suggesting increasing value added relative to the invested capital during this period. After 2022, the ratio decreased to 47.11% in 2023 and slightly declined again to 46.44% in 2024, indicating a reduction in relative value creation despite still maintaining a relatively high spread compared to earlier years.
Overall, the data depicts a period of strong value creation from 2020 through 2022 with both MVA and MVA spread ratio peaking. However, the subsequent two years show a downward trend in these metrics, signaling a potential decline in market value added and efficiency in generating returns above invested capital. Invested capital, conversely, remained fairly stable with minor fluctuations, implying stable asset base amid changing market value conditions.
MVA Margin
Chevron 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 | ||||||
| Sales and other operating revenues | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
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 ÷ Sales and other operating revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial data over the five-year period reveals several notable trends regarding the company's market value added, revenue generation, and efficiency as measured by the MVA margin.
- Market Value Added (MVA)
- The Market Value Added shows a significant increase from US$50,974 million in 2020 to a peak of US$122,550 million in 2022. However, following this peak, the MVA declines in the subsequent years, reducing to US$96,780 million by the end of 2024. This suggests that after a period of robust value creation, the company's ability to add market value has weakened somewhat in the latest years.
- Sales and Other Operating Revenues
- Sales and other operating revenues exhibit a strong upward trajectory, increasing steadily from US$94,471 million in 2020 to a high of US$235,717 million in 2022. Nevertheless, revenues show a declining trend afterward, reducing to US$193,414 million in 2024. Despite this decrease, the revenue levels remain substantially higher than at the start of the period, indicating sustained growth overall but some retrenchment in the later years.
- MVA Margin
- The MVA margin percentage demonstrates a peak at 67.8% in 2021, suggesting heightened efficiency or value creation relative to revenues. Post-2021, the margin declines steadily to 50.04% by 2024, indicating a reduction in the relative market value added per unit of revenue. While still above 50%, this decline could point to increasing costs, margin pressures, or other operational challenges affecting profitability and value generation.
Overall, the company experienced strong growth and enhanced value creation through 2021 and 2022, followed by a period of declining market value added and margins despite elevated revenue levels remaining above those at the beginning of the period. The trends suggest a potential shift in market conditions or internal dynamics impacting performance beyond 2022.