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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EOG Resources Inc. pages available for free this week:
- Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Current Ratio since 2005
- Price to Earnings (P/E) since 2005
- Price to Sales (P/S) since 2005
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MVA
EOG Resources Inc., MVA calculation
US$ in thousands
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of EOG Resources Inc.
- The market value experienced a significant upward trend from 2015 to 2017. It increased from approximately $44.9 billion in 2015 to nearly $68.9 billion in 2017, marking a strong growth period. However, this was followed by a decline in the subsequent years, with the market value dropping to around $61.1 billion in 2018 and further decreasing to approximately $41.2 billion in 2019.
- Invested capital
- The invested capital showed a steady increase throughout the five-year period. Starting from about $24.4 billion in 2015, it rose persistently to roughly $32.7 billion by the end of 2019. This steady upward trend in invested capital indicates ongoing investments and asset growth over the years, despite fluctuations in market value.
- Market value added (MVA)
- Market value added followed a similar pattern to the market value, exhibiting strong growth from 2015 to 2017. It increased sharply from $20.4 billion in 2015 to a peak of $42.3 billion in 2017. Subsequently, MVA declined notably in 2018 and 2019, falling to about $30.7 billion and then down to $8.6 billion respectively. This decline signifies a reduction in the market's valuation over and above the invested capital, indicating diminishing market confidence or value creation after 2017.
MVA Spread Ratio
EOG Resources Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2019 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added demonstrated a significant increase from 2015 through 2017, rising from approximately 20.4 billion US dollars to over 42.3 billion US dollars. In 2018, there was a notable decline to approximately 30.7 billion US dollars, followed by a further substantial decrease in 2019, falling to around 8.6 billion US dollars.
- Invested Capital
- Invested capital showed a consistent upward trend throughout the analyzed period. Beginning at about 24.4 billion US dollars in 2015, it increased annually to reach approximately 32.7 billion US dollars by the end of 2019, indicating continuous capital investment in the business.
- MVA Spread Ratio
- The MVA spread ratio, which indicates the return spread on invested capital, exhibited a strong upward trend from 83.6% in 2015 to a peak of 159.29% in 2017. This was followed by a sharp decline to just over 101% in 2018 and a more pronounced drop to approximately 26.23% in 2019, suggesting diminishing value creation relative to the capital invested in the latter years.
MVA Margin
EOG Resources Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Operating revenues and other | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 MVA. See details »
2 2019 Calculation
MVA margin = 100 × MVA ÷ Operating revenues and other
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added shows considerable fluctuation over the five-year period. Starting at approximately 20.4 billion US dollars in 2015, it increased significantly to about 37.7 billion in 2016, and further to 42.3 billion in 2017. However, a sharp decline occurred by the end of 2018, reducing the MVA to 30.7 billion. This downward trend continued into 2019, where the MVA dropped markedly to approximately 8.6 billion US dollars.
- Operating Revenues and Other
- Operating revenues and other income exhibit an overall upward trend across the period analyzed. From 8.76 billion US dollars in 2015, revenues decreased slightly in 2016 to 7.65 billion. Thereafter, revenues showed strong growth, reaching 11.2 billion in 2017 and accelerating to 17.3 billion in 2018. The level remained relatively stable from 2018 to 2019, with a slight increase to 17.4 billion.
- MVA Margin
- The MVA margin percentage demonstrates high volatility throughout the years. It peaked in 2016 at nearly 493%, reflecting significant value creation relative to operating revenues. Afterward, the margin dropped to 378% in 2017 and sharply declined to 178% in 2018. By 2019, the margin reduced further to 49.3%, indicating a considerable decrease in market value creation relative to revenue.
- Summary
- The overall analysis reveals that despite a generally increasing trend in operating revenues from 2016 through 2019, the market value added and the MVA margin have experienced notable declines since their peaks in 2016 and 2017. This divergence suggests that revenue growth did not translate into proportional increases in market value, potentially indicating challenges in market perception, operational efficiency, or other external factors impacting shareholder value during the latter years.