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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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 »
- Market (fair) value of Dollar General
- The market value exhibited a generally upward trend from 2019 through 2022, increasing from approximately $41.58 billion to a peak of around $67.07 billion. However, this positive trajectory reversed in the subsequent two years, with the market value falling to about $62.67 billion in 2023 and further declining to approximately $51.07 billion in 2024. This indicates a significant decrease in market valuation over the most recent two-year period following a period of growth.
- Invested capital
- Invested capital consistently increased over the entire six-year span, beginning at about $18.11 billion in 2019 and rising steadily each year to reach around $26.31 billion in 2024. This persistent growth suggests ongoing investment in the company's assets and operations, reflecting expansion or capital improvement efforts despite fluctuations in market value.
- Market value added (MVA)
- The market value added showed an increasing trend from 2019 through 2022, growing from approximately $23.47 billion to a peak of about $45.57 billion. This indicates substantial value creation above the invested capital during this period. However, similar to the market value trend, the MVA declined notably over the last two years to about $37.91 billion in 2023 and further down to approximately $24.76 billion in 2024. The decline in MVA suggests a reduction in the market's valuation premium relative to the invested capital over recent years.
MVA Spread Ratio
Dollar General Corp., MVA spread ratio calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Market value added (MVA)1 | |||||||
| Invested capital2 | |||||||
| Performance Ratio | |||||||
| MVA spread ratio3 | |||||||
| Benchmarks | |||||||
| MVA Spread Ratio, Competitors4 | |||||||
| Costco Wholesale Corp. | |||||||
| Target Corp. | |||||||
| Walmart Inc. | |||||||
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 × ÷ =
4 Click competitor name to see calculations.
The financial data reveals distinct trends in market value added (MVA), invested capital, and MVA spread ratio over the six-year period analyzed.
- Market Value Added (MVA)
- MVA displayed a general upward trajectory from 2019 to 2022, rising from approximately $23.5 billion to $45.6 billion. This indicates substantial growth in the company's market value relative to its invested capital during these years. However, in 2023 and 2024, MVA experienced a notable decline, falling to about $37.9 billion and then further down to $24.8 billion, suggesting a reduction in value generation for shareholders in the most recent years.
- Invested Capital
- Invested capital showed a steady increase across all periods, growing from approximately $18.1 billion in 2019 to $26.3 billion in 2024. This suggests continuous investment or reinvestment in the company's operational assets and capital base, reflecting expansion or increased resource allocation.
- MVA Spread Ratio
- The MVA spread ratio, reflecting the percentage return relative to invested capital, rose consistently from 129.61% in 2019 to a peak of 211.96% in 2022, indicating improving efficiency and value creation. However, similar to the MVA trend, this ratio fell sharply to 153.08% in 2023 and further down to 94.11% in 2024, nearing a breakeven scenario and implying diminishing returns on invested capital.
Overall, the data suggests that while dollar general corp. experienced significant growth and value creation between 2019 and 2022, recent years have seen a reversal in these trends, with both market value added and efficiency in capital utilization declining despite increased invested capital. This may indicate emerging challenges in maintaining profitability or market valuation relative to growing capital investment.
MVA Margin
Dollar General Corp., MVA margin calculation, comparison to benchmarks
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Market value added (MVA)1 | |||||||
| Net sales | |||||||
| Performance Ratio | |||||||
| MVA margin2 | |||||||
| Benchmarks | |||||||
| MVA Margin, Competitors3 | |||||||
| Costco Wholesale Corp. | |||||||
| Target Corp. | |||||||
| Walmart Inc. | |||||||
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 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added exhibits a general upward trend from 2019 through 2022, rising from approximately 23.5 billion to 45.6 billion US dollars. This peak in 2022 represents a significant increase compared to previous years. However, following this peak, there is a notable decline in 2023 and further in 2024, with MVA dropping to about 24.8 billion US dollars, a reduction that brings it close to the 2019 level.
- Net Sales
- Net Sales demonstrate consistent growth over the entire period, increasing steadily from roughly 25.6 billion US dollars in 2019 to 38.7 billion US dollars by 2024. There is a slight deceleration in growth after 2021, but sales continue to increase each year without any decline.
- MVA Margin
- The MVA Margin, which represents the Market Value Added as a percentage of Net Sales, shows a steady increase from 91.58% in 2019 to a peak of 133.17% in 2022. This indicates improved efficiency or value creation relative to sales during this period. Nevertheless, the margin decreases sharply in 2023 and further in 2024, dropping to 63.99%, which signals a reduction in market value relative to sales.
- Summary Insight
- While Net Sales have consistently grown year over year, the Market Value Added and the MVA Margin reveal more volatility. The surge in MVA and MVA Margin up to 2022 suggests strong market confidence and value generation beyond sales growth. The subsequent decline afterwards, despite increasing sales, could indicate market reassessment or other factors negatively impacting perceived company value. This divergence between continued sales growth and declining market value indicators warrants further investigation into market conditions or company-specific challenges during the later periods.