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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Delta Air Lines Inc. pages available for free this week:
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Equity (ROE) since 2007
- Total Asset Turnover since 2007
- Analysis of Revenues
- Analysis of Debt
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MVA
Delta Air Lines Inc., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
The financial data indicates several notable trends in the company's market valuation, invested capital, and market value added over the five-year span ending in 2021.
- Market (fair) value
- The market value exhibits some fluctuations but overall shows a moderate increasing trend. Beginning at $57,734 million in 2017, it decreases to $49,953 million in 2018, rises again to $54,299 million in 2019, peaks at $57,793 million in 2020, and modestly increases to $58,738 million in 2021. This pattern reflects some volatility but ultimately growth over the period.
- Invested capital
- Invested capital starts at $44,409 million in 2017, declines slightly to $43,326 million in 2018, then increases gradually to $47,580 million by 2019. It experiences a decrease again in 2020 to $44,197 million, followed by a recovery to $47,166 million in 2021. This fluctuation suggests a somewhat variable investment strategy, possibly influenced by external or operational factors.
- Market value added (MVA)
- MVA, which represents the additional value created over invested capital, also displays notable variation. From $13,326 million in 2017, it nearly halves to $6,627 million in 2018, remains relatively stable at $6,719 million in 2019, then more than doubles to reach $13,596 million in 2020 before slightly declining to $11,572 million in 2021. This trend indicates a potential improvement in value creation post-2019, despite some decrease at the end of the period.
MVA Spread Ratio
Delta Air Lines Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2021 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added shows a fluctuating pattern over the five-year period. It started at 13,326 million US dollars in 2017 and significantly decreased to 6,627 million US dollars in 2018. The value remained relatively stable in 2019 at 6,719 million. In 2020, MVA surged again to 13,596 million, almost doubling the previous year, before slightly declining to 11,572 million in 2021. Overall, MVA shows volatility with a notable recovery in 2020 and a modest decrease in 2021.
- Invested Capital
- Invested Capital experienced modest fluctuations during the period reviewed. It reduced slightly from 44,409 million US dollars in 2017 to 43,326 million in 2018, then increased to 47,580 million in 2019. A decline followed in 2020 to 44,197 million, and it rose again in 2021 to 47,166 million. The invested capital remained within a relatively narrow range with no extreme variations, suggesting stable capital investment levels with minor adjustments year to year.
- MVA Spread Ratio
- The MVA spread ratio exhibited a decline from 30.01% in 2017 to 15.3% in 2018, and a further slight decrease to 14.12% in 2019. However, it rebounded in 2020 to 30.76%, aligning closely with the 2017 value, before settling at 24.54% in 2021. This ratio indicates the return spread relative to invested capital, showing a significant drop in 2018 and 2019, followed by a strong recovery in 2020 and a moderate decline in 2021.
- Overall Analysis
- The data reveals a pattern of decline in key performance indicators during 2018 and 2019, which may suggest operational or market challenges in this timeframe. The sharp rebounds in 2020, particularly in MVA and the MVA spread ratio, indicate a recovery phase, although some correction occurred in 2021. The invested capital values indicate relatively steady investment levels, without drastic changes, pointing toward consistent capital allocation policies across the years reviewed.
MVA Margin
Delta Air Lines Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Operating revenue | ||||||
| Add: Increase (decrease) in loyalty program deferred revenue | ||||||
| Adjusted operating revenue | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 MVA. See details »
2 2021 Calculation
MVA margin = 100 × MVA ÷ Adjusted operating revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added demonstrates significant volatility throughout the observed periods. Starting at 13,326 million USD at the end of 2017, it experienced a notable decline to approximately half of that value in 2018 (6,627 million USD). The value remained relatively stable in 2019 with a slight increase to 6,719 million USD. A substantial rebound occurred in 2020, with MVA almost doubling to 13,596 million USD, followed by a moderate decline to 11,572 million USD in 2021. This pattern suggests fluctuating market perceptions of the company's value, possibly influenced by external factors impacting the industry.
- Adjusted Operating Revenue
- Adjusted Operating Revenue displayed a general upward trend from 2017 through 2019, increasing from 41,436 million USD to 47,094 million USD. This growth was interrupted sharply in 2020, where revenues fell drastically to 17,549 million USD, representing a decline of over 60%. However, there was a significant recovery in 2021, with revenue rising to 30,276 million USD, though still below pre-2020 levels. This trajectory indicates a major disruption likely impacting operations during 2020, followed by a partial recovery in the subsequent year.
- MVA Margin
- The MVA margin, expressed as a percentage, parallels the volatility seen in Market Value Added. After starting at 32.16% in 2017, it dropped markedly to 14.81% in 2018 and further slightly to 14.27% in 2019. A substantial increase to 77.48% occurred in 2020, reflecting a significant shift in the ratio of market value added relative to adjusted operating revenue during that year. In 2021, the margin receded to 38.22%, which remains higher than the 2018-2019 period but well below the exceptional 2020 peak. This fluctuation indicates a changing relationship between value creation and revenue generation, with 2020 showing an unusually high margin likely due to the revenue decline.