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
Cigna Group, 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 »
An analysis of the financial performance between 2020 and 2024 reveals a period of expansion in shareholder value creation that peaked in 2023, followed by a notable contraction in the final year of the period.
- Market Value Dynamics
- The market value exhibited volatility over the five-year span, beginning at 113,123 million US$ in 2020 and climbing to a peak of 128,223 million US$ by December 31, 2023. A significant reversal occurred in 2024, where the market value declined to 112,469 million US$, returning to levels slightly below those recorded at the start of the period.
- Invested Capital Trends
- A consistent downward trend in invested capital is observed. The capital base decreased from 93,748 million US$ in 2020 to 81,638 million US$ by the end of 2024. This steady reduction indicates a decrease in the total amount of capital employed in the business over the analyzed timeframe.
- Market Value Added (MVA) Performance
- The MVA demonstrated substantial growth between 2020 and 2023, increasing from 19,375 million US$ to a maximum of 42,446 million US$. This growth was propelled by the divergence between increasing market valuations and a shrinking capital base. However, in 2024, MVA fell to 30,831 million US$, reflecting a reduction in the market premium relative to the invested capital.
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MVA Spread Ratio
Cigna Group, 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 | 30,831) | 42,446) | 31,170) | 19,719) | 19,375) | |
| Invested capital2 | 81,638) | 85,777) | 85,650) | 90,679) | 93,748) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 37.77% | 49.48% | 36.39% | 21.75% | 20.67% | |
| 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 × 30,831 ÷ 81,638 = 37.77%
4 Click competitor name to see calculations.
The financial trajectory between 2020 and 2024 reflects a period of significant valuation growth followed by a corrective phase, characterized by a diverging relationship between market value creation and the invested capital base.
- Market Value Added (MVA)
- A consistent upward trend in MVA is observed from 2020 through 2023, with the value rising from 19,375 million US$ to a peak of 42,446 million US$. This represents a substantial increase in the premium the market placed over the invested capital. However, this trend reversed in 2024, with MVA declining to 30,831 million US$, indicating a reduction in market-perceived value added during the final period.
- Invested Capital
- The invested capital demonstrates a gradual and steady contraction over the five-year period. From a high of 93,748 million US$ in 2020, the capital base decreased to 81,638 million US$ by 2024. This downward trend suggests a strategic reduction in the capital employed or a systematic return of capital to shareholders, occurring independently of the fluctuations seen in market valuation.
- MVA Spread Ratio
- The MVA spread ratio experienced significant expansion between 2020 and 2023, accelerating from 20.67% to a peak of 49.48%. This expansion was driven by the simultaneous increase in MVA and the decrease in invested capital, suggesting heightened capital efficiency and market optimism. In 2024, the ratio retreated to 37.77%, mirroring the decline in MVA, although it remains substantially higher than the 2020 and 2021 levels.
Overall, the data indicates that while the company successfully increased its market value relative to its capital base for the majority of the period, the gains reached a ceiling in 2023 before experiencing a contraction in 2024.
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MVA Margin
Cigna Group, 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 | 30,831) | 42,446) | 31,170) | 19,719) | 19,375) | |
| Revenues from external customers | 246,148) | 194,099) | 179,361) | 172,529) | 159,157) | |
| Performance Ratio | ||||||
| MVA margin2 | 12.53% | 21.87% | 17.38% | 11.43% | 12.17% | |
| 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 external customers
= 100 × 30,831 ÷ 246,148 = 12.53%
3 Click competitor name to see calculations.
The financial data reveals a period of significant volatility in market value creation between 2020 and 2024, characterized by a strong upward trajectory peaking in 2023 followed by a correction in 2024. While revenue growth remained consistent throughout the five-year period, the market's valuation of the added value did not scale proportionally in the final year.
- Market Value Added (MVA) Trends
- Market value added experienced steady growth from 2020 to 2023, rising from 19,375 million USD to a peak of 42,446 million USD. This represents a substantial increase in the value created for shareholders over that interval. However, this trend reversed in 2024, with MVA decreasing to 30,831 million USD, indicating a reduction in the market's premium over the company's capital invested.
- Revenue Trajectory
- Revenues from external customers exhibited an uninterrupted upward trend over the analyzed period. Revenue increased from 159,157 million USD in 2020 to 246,148 million USD in 2024. Notably, the most significant jump occurred between 2023 and 2024, where revenue grew by approximately 52,049 million USD.
- MVA Margin Analysis
- The MVA margin, which measures the efficiency of value creation relative to revenue, fluctuated significantly. After a slight dip in 2021 to 11.43%, the margin expanded rapidly to reach a high of 21.87% in 2023. In 2024, the margin contracted sharply to 12.53%. This contraction is particularly notable because it occurred despite the record high revenue reported in the same year, suggesting that the increase in scale did not translate into a proportional increase in market-perceived value.
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