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
Corning Inc., MVA calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2019-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
The financial trajectory between 2019 and 2023 is characterized by a period of significant market value appreciation followed by a subsequent contraction. While the invested capital remained relatively stable, the fair market value experienced substantial volatility, which directly influenced the Market Value Added (MVA).
- Market Value Trends
- A consistent increase in fair market value was observed from 2019 to 2021, rising from US$ 32,772 million to a peak of US$ 44,277 million. Following this peak, a downward trend occurred, with the value declining to US$ 37,694 million in 2022 and further to US$ 36,060 million by the end of 2023.
- Invested Capital Stability
- Invested capital exhibited limited variance over the five-year period. After a slight increase to US$ 21,233 million in 2020, the capital base remained relatively constant, fluctuating between US$ 19,666 million and US$ 20,411 million from 2021 through 2023. This indicates a steady level of invested resources regardless of the shifts in market capitalization.
- Market Value Added (MVA) Performance
- MVA mirrored the volatility of the market value, peaking in 2021 at US$ 24,561 million, which represents the highest level of value creation over invested capital within the analyzed timeframe. This peak was followed by a sharp decline to US$ 18,028 million in 2022 and a further reduction to US$ 15,649 million by December 31, 2023. The correlation between market value and MVA suggests that the changes in shareholder value creation were driven primarily by external market perceptions rather than changes in the underlying invested capital base.
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MVA Spread Ratio
Corning Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 15,649) | 18,028) | 24,561) | 19,880) | 13,900) | |
| Invested capital2 | 20,411) | 19,666) | 19,716) | 21,233) | 18,872) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 76.67% | 91.67% | 124.57% | 93.63% | 73.65% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Apple Inc. | 4,423.16% | 5,157.62% | 5,626.48% | — | — | |
| Arista Networks Inc. | 1,575.63% | 1,226.33% | 1,872.91% | — | — | |
| Cisco Systems Inc. | 279.75% | 214.20% | 329.31% | — | — | |
| Dell Technologies Inc. | 2.11% | 31.48% | 53.40% | — | — | |
| Lumentum Holdings Inc. | 73.48% | 196.72% | 256.49% | — | — | |
| Super Micro Computer Inc. | 466.63% | 91.12% | 50.17% | — | — | |
Based on: 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), 10-K (reporting date: 2019-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2023 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 15,649 ÷ 20,411 = 76.67%
4 Click competitor name to see calculations.
The financial performance from 2019 to 2023 is characterized by a significant cycle of value creation followed by a valuation correction, while the underlying capital base remained relatively stable.
- Market Value Added (MVA)
- A substantial upward trajectory was observed between 2019 and 2021, with MVA increasing from US$ 13,900 million to a peak of US$ 24,561 million. This indicates a period of strong expansion in the market's valuation of the company's ability to generate returns exceeding its cost of capital. However, a subsequent decline occurred over the following two years, with the value receding to US$ 15,649 million by December 31, 2023.
- Invested Capital
- The invested capital base exhibited relative stability throughout the analyzed period, fluctuating within a narrow range between US$ 18,872 million and US$ 21,233 million. The peak in invested capital occurred in 2020, followed by a period of marginal contraction and stabilization at US$ 20,411 million by 2023. The lack of significant volatility in this metric suggests that the fluctuations in MVA were driven by market sentiment and performance expectations rather than drastic changes in the physical or financial capital deployed.
- MVA Spread Ratio
- The MVA spread ratio mirrored the volatility of the absolute MVA, rising from 73.65% in 2019 to a peak of 124.57% in 2021. This peak represents the period of highest efficiency in value creation relative to the capital invested. A downward trend followed, with the ratio falling to 91.67% in 2022 and further to 76.67% in 2023, indicating a contraction in the premium the market assigns to the company's invested capital.
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MVA Margin
Corning Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 15,649) | 18,028) | 24,561) | 19,880) | 13,900) | |
| Net sales | 12,588) | 14,189) | 14,082) | 11,303) | 11,503) | |
| Add: Increase (decrease) in deferred revenue | (9) | (43) | (112) | 1,024) | —) | |
| Adjusted net sales | 12,579) | 14,146) | 13,970) | 12,327) | 11,503) | |
| Performance Ratio | ||||||
| MVA margin2 | 124.40% | 127.44% | 175.81% | 161.28% | 120.84% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Apple Inc. | 695.76% | 609.53% | 653.71% | — | — | |
| Arista Networks Inc. | 1,189.41% | 844.93% | 1,097.06% | — | — | |
| Cisco Systems Inc. | 278.31% | 240.26% | 367.17% | — | — | |
| Dell Technologies Inc. | 1.17% | 16.47% | 45.88% | — | — | |
| Lumentum Holdings Inc. | 120.58% | 287.34% | 289.28% | — | — | |
| Super Micro Computer Inc. | 158.10% | 38.75% | 18.09% | — | — | |
Based on: 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), 10-K (reporting date: 2019-12-31).
1 MVA. See details »
2 2023 Calculation
MVA margin = 100 × MVA ÷ Adjusted net sales
= 100 × 15,649 ÷ 12,579 = 124.40%
3 Click competitor name to see calculations.
The financial performance from 2019 to 2023 is characterized by a period of significant market valuation expansion peaking in 2021, followed by a corrective phase in 2022 and 2023. While revenue showed a general upward trajectory until 2022, the market value added and its corresponding margin experienced more volatile fluctuations, indicating a decoupling between top-line growth and market capitalization during the latter half of the period.
- Market Value Added (MVA)
- A strong upward trend was observed between 2019 and 2021, with MVA rising from 13,900 million USD to a peak of 24,561 million USD. This represents a substantial increase in the value created for shareholders over the cost of capital. However, a sharp reversal occurred in 2022, with value dropping to 18,028 million USD, and a further decline to 15,649 million USD by the end of 2023.
- Adjusted Net Sales
- Revenue exhibited steady growth for the first four years of the period, increasing from 11,503 million USD in 2019 to a peak of 14,146 million USD in 2022. This consistent growth suggests a period of operational expansion. A contraction was noted in 2023, where adjusted net sales fell to 12,579 million USD, aligning with the broader downward trend in market valuation.
- MVA Margin
- The MVA margin followed a trajectory similar to the absolute MVA, expanding from 120.84% in 2019 to a maximum of 175.81% in 2021. The subsequent decline to 127.44% in 2022 and 124.40% in 2023 indicates that the market's premium valuation of the company relative to its sales diminished significantly after 2021. The fact that the margin dropped sharply in 2022 while net sales were still reaching their peak suggests that market sentiment shifted independently of immediate revenue performance.
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