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
Dollar General Corp., MVA calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
1 Fair value of debt. See details »
2 Invested capital. See details »
The financial trajectory from February 2019 to February 2024 reveals a period of significant expansion in market valuation and invested capital, followed by a notable contraction in market-perceived value. While invested capital maintained a consistent upward trajectory throughout the six-year period, the market value added experienced a cyclical peak and a subsequent sharp decline.
- Market Value Trends
- The market valuation exhibited strong growth for the first four years of the analyzed period, rising from 41.58 billion USD in February 2019 to a peak of 67.07 billion USD in January 2022. However, this trend reversed after 2022, with the valuation decreasing to 62.67 billion USD by February 2023 and further dropping to 51.07 billion USD by February 2024.
- Invested Capital Progression
- Invested capital demonstrates a steady and uninterrupted increase over the reporting period. Starting at 18.11 billion USD in February 2019, capital investment grew incrementally to 21.50 billion USD by January 2022, with a more pronounced acceleration in the final two years, reaching 26.31 billion USD by February 2024. This indicates a consistent commitment to expanding the asset base regardless of market volatility.
- Market Value Added (MVA) Analysis
- The MVA followed a trajectory closely aligned with the market valuation. MVA increased substantially from 23.47 billion USD in 2019 to a maximum of 45.57 billion USD in January 2022, suggesting that the market's valuation of the company's future growth prospects and efficiency significantly exceeded the capital invested. Following this peak, MVA declined sharply to 37.91 billion USD in 2023 and further to 24.76 billion USD in 2024.
- Comparative Capital Efficiency
- A divergence is observed between the growth of invested capital and the generation of market value added. By February 2024, the MVA of 24.76 billion USD returned to a level near that of February 2019 (23.47 billion USD), despite the invested capital having increased by approximately 45% (from 18.11 billion USD to 26.31 billion USD) over the same timeframe. This suggests a reduction in the market's premium attributed to the company's capital employment.
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MVA Spread Ratio
Dollar General Corp., MVA spread ratio calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Market value added (MVA)1 | 24,759,752) | 37,909,208) | 45,572,302) | 38,198,068) | 28,828,255) | 23,468,552) | |
| Invested capital2 | 26,309,034) | 24,763,719) | 21,499,995) | 20,896,699) | 19,125,860) | 18,107,408) | |
| Performance Ratio | |||||||
| MVA spread ratio3 | 94.11% | 153.08% | 211.96% | 182.79% | 150.73% | 129.61% | |
| Benchmarks | |||||||
| MVA Spread Ratio, Competitors4 | |||||||
| Costco Wholesale Corp. | 1,145.79% | 641.08% | 601.38% | 635.70% | — | — | |
| Target Corp. | 179.94% | 210.89% | 289.75% | 247.97% | — | — | |
| Walmart Inc. | 257.71% | 195.10% | 201.42% | 174.24% | — | — | |
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
1 MVA. See details »
2 Invested capital. See details »
3 2024 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 24,759,752 ÷ 26,309,034 = 94.11%
4 Click competitor name to see calculations.
An analysis of the financial metrics from February 2019 to February 2024 reveals a period of significant growth in market value followed by a substantial correction, occurring alongside a steady increase in the company's invested capital base.
- Market Value Added (MVA)
- A positive growth trajectory is observed from February 1, 2019, through January 28, 2022, with MVA increasing from $23.47 billion to a peak of $45.57 billion. This growth represents nearly a doubling of market value added over a three-year period. However, a sharp reversal occurred post-2022, with value contracting to $37.91 billion by February 3, 2023, and further declining to $24.76 billion by February 2, 2024, effectively erasing most of the gains achieved during the expansion phase.
- Invested Capital
- Unlike the volatility observed in market value, invested capital demonstrated consistent annual growth throughout the six-year period. The capital base expanded from $18.11 billion in 2019 to $26.31 billion in 2024. This steady climb indicates continuous investment into the business operations despite the subsequent fluctuations in market valuation.
- MVA Spread Ratio
- The MVA spread ratio mirrored the trend of the Market Value Added, peaking at 211.96% in January 2022. This peak indicated a period of maximum efficiency in value creation relative to the capital employed. A subsequent decline is noted, with the ratio dropping to 153.08% in 2023 and falling to 94.11% by February 2, 2024. The descent below the 100% threshold in the final year signifies a critical shift, as the market value added no longer exceeds the total invested capital, marking a significant contraction in value creation efficiency compared to the historical highs of the preceding years.
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MVA Margin
Dollar General Corp., MVA margin calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Market value added (MVA)1 | 24,759,752) | 37,909,208) | 45,572,302) | 38,198,068) | 28,828,255) | 23,468,552) | |
| Net sales | 38,691,609) | 37,844,863) | 34,220,449) | 33,746,839) | 27,753,973) | 25,625,043) | |
| Performance Ratio | |||||||
| MVA margin2 | 63.99% | 100.17% | 133.17% | 113.19% | 103.87% | 91.58% | |
| Benchmarks | |||||||
| MVA Margin, Competitors3 | |||||||
| Costco Wholesale Corp. | 151.44% | 94.13% | 85.51% | 94.36% | — | — | |
| Target Corp. | 57.47% | 58.41% | 82.41% | 80.82% | — | — | |
| Walmart Inc. | 62.31% | 48.16% | 55.42% | 51.59% | — | — | |
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
1 MVA. See details »
2 2024 Calculation
MVA margin = 100 × MVA ÷ Net sales
= 100 × 24,759,752 ÷ 38,691,609 = 63.99%
3 Click competitor name to see calculations.
Analysis of the financial performance between February 2019 and February 2024 reveals a notable divergence between sustained operational growth and fluctuating market valuation.
- Market Value Added (MVA)
- A period of significant expansion is observed from February 2019 through January 2022, during which MVA rose from $23.47 billion to a peak of $45.57 billion. This growth was followed by a substantial retraction over the subsequent two fiscal years, with values falling to $37.91 billion in 2023 and further declining to $24.76 billion by February 2024, effectively returning to 2019 levels.
- Net Sales Growth
- In contrast to the volatility seen in MVA, net sales demonstrated a consistent and linear upward trajectory. Revenue increased steadily from $25.63 billion in 2019 to $38.69 billion in 2024, indicating uninterrupted growth in the company's top-line operational scale throughout the observed period.
- MVA Margin Analysis
- The MVA margin exhibited a pattern reflecting the absolute MVA trends but relative to sales volume. The margin improved from 91.58% in 2019 to a maximum of 133.17% in 2022. However, a sharp contraction occurred thereafter, with the margin dropping to 100.17% in 2023 and reaching a period low of 63.99% in 2024.
The data indicates that while the company successfully expanded its revenue base, the market's valuation premium relative to those sales peaked in 2022. The subsequent decline in the MVA margin suggests a diminishing market valuation of the company's value creation relative to its sales growth toward the end of the analyzed period.
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