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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Danaher Corp. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to EBITDA (EV/EBITDA)
- Dividend Discount Model (DDM)
- Aggregate Accruals
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MVA
Danaher 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 Danaher
- The market value increased from 183,223 million US dollars in 2020 to a peak of 214,523 million in 2021. Following this peak, a decline was observed, with the value decreasing to 201,299 million in 2022 and remaining relatively stable at 202,392 million in 2023. By 2024, a significant drop occurred, bringing the market value down to 163,165 million US dollars, which is the lowest point in the observed period.
- Invested capital
- Invested capital showed a consistent increasing trend from 67,123 million US dollars in 2020 to 78,561 million in 2023. However, in 2024, there was a decrease to 73,131 million, indicating a slight contraction in invested capital after several years of growth.
- Market value added (MVA)
- MVA, representing the difference between market value and invested capital, followed a pattern similar to the market value. It increased from 116,100 million in 2020 to a maximum of 139,890 million in 2021, then declined to 122,957 million in 2022 and stayed close to that figure with 123,831 million in 2023. By 2024, MVA sharply decreased to 90,034 million, reflecting a substantial reduction in the company’s value creation relative to invested capital.
MVA Spread Ratio
Danaher 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 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
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 reveals several important trends and changes over the observed period.
- Market Value Added (MVA)
- The MVA shows an overall increase from 116,100 million USD at the end of 2020 to a peak of 139,890 million USD in 2021. However, there is a noticeable decline afterward, falling to 122,957 million USD in 2022, remaining relatively stable in 2023 at 123,831 million USD, and then dropping significantly to 90,034 million USD by the end of 2024. This decline in the last year suggests a reduction in the market's valuation of the company's capital beyond its invested capital.
- Invested Capital
- Invested capital experienced a consistent upward trend from 67,123 million USD in 2020 to a peak of 78,561 million USD in 2023. There is a slight decrease to 73,131 million USD in 2024. This indicates incremental investments or capital growth over the first four years, followed by a moderate contraction in the latest year.
- MVA Spread Ratio
- The MVA spread ratio, which measures the premium of market value over invested capital, shows a peak of 187.44% in 2021. It decreases steadily to 156.95% in 2022 and remains almost flat at 157.62% in 2023, before dropping sharply to 123.11% in 2024. This downward trend reflects a diminishing return or premium generated on the invested capital in recent years, particularly in the most current period.
In summary, the data suggests that after strong growth in market valuation relative to invested capital up to 2021, the company has encountered a period of decline in both market value and relative performance metrics through 2024. The invested capital grew until 2023 before contracting slightly, while the market's premium valuation over invested capital has decreased significantly in the last recorded year. This may warrant investigation into underlying factors affecting market perception and capital efficiency.
MVA Margin
Danaher 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 | ||||||
| Add: Increase (decrease) in contract liabilities | ||||||
| Adjusted sales | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
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 ÷ Adjusted sales
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added (MVA) demonstrated an initial increasing trend from US$116,100 million in 2020 to a peak of US$139,890 million in 2021. Following this peak, MVA declined to US$122,957 million in 2022 and remained relatively stable in 2023 at US$123,831 million. However, there was a significant decrease in 2024, with MVA falling sharply to US$90,034 million.
- Adjusted Sales
- Adjusted sales showed considerable growth from 2020 through 2022, increasing from US$22,895 million to a high of US$31,528 million in 2022. However, this upward trajectory reversed in 2023 and 2024, with sales dropping to US$23,927 million and US$23,692 million respectively, indicating a marked contraction in sales activity over the last two years.
- MVA Margin
- The MVA margin, which measures market value added as a percentage of sales, displayed fluctuations throughout the period under review. It declined from 507.1% in 2020 to 468.46% in 2021, followed by a further decrease to 389.99% in 2022. In 2023, the margin rebounded sharply to 517.54%, marking the highest point in the five-year span. Nevertheless, this was followed by another significant drop in 2024 to 380.02%, the lowest margin in the observed timeframe.
- Overall Observations
- The company's financial indicators illustrate volatility, particularly in the later years of the period analyzed. The MVA and adjusted sales peaked around 2021-2022 before experiencing declines, suggesting challenges in sustaining growth momentum. The pronounced fluctuations in MVA margin further highlight variability in how market value added relates to sales, with the peak in 2023 not sustained into 2024. The sharp decreases in both MVA and sales in 2024 may warrant closer examination of underlying operational or market factors influencing performance.