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.
Paying user area
Try for free
Eaton Corp. plc pages available for free this week:
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Eaton Corp. plc for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
MVA
Eaton Corp. plc, MVA calculation
US$ 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 »
The analyzed data reveals significant developments over the five-year period from 2020 to 2024. Market (fair) value of Eaton demonstrates a consistent upward trend until 2023, rising from 61,717 million USD in 2020 to a peak of 122,968 million USD in 2023. However, there is a slight decline in 2024, with the value decreasing to 121,830 million USD. Despite this minor drop, the market value remains substantially higher than the starting point, indicating strong overall market valuation growth.
Invested capital also shows a steady increase over the period, though at a much slower pace compared to market value. It grows from 27,450 million USD in 2020 to 31,924 million USD in 2024. This gradual rise suggests ongoing investment and capital accumulation by the company, but without the pronounced surges seen in market value.
Market value added (MVA), which measures the difference between market value and invested capital, mirrors the strong growth pattern of market value. Starting at 34,267 million USD in 2020, it increases significantly to 91,392 million USD by 2023, before slightly retreating to 89,906 million USD in 2024. The sharp expansion of MVA indicates that the market increasingly values the company beyond its invested capital, reflecting enhanced perceived value or investor confidence. The marginal decline in MVA in the final year corresponds with the dip observed in market value, although MVA remains elevated compared to earlier years.
Overall, the data depict robust growth in market valuation and value creation relative to invested capital over the analyzed period, signifying positive market sentiment and effective capital utilization. The slight deceleration in 2024 warrants monitoring but does not significantly detract from the strong upward trend established in prior years.
MVA Spread Ratio
Eaton Corp. plc, 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 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
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 over the five-year period reveals notable trends in market value added (MVA), invested capital, and the MVA spread ratio. These indicators provide insights into value creation and investment efficiency.
- Market Value Added (MVA)
- The MVA exhibits a consistent upward trajectory from 34,267 million US dollars in 2020 to a peak of 91,392 million US dollars in 2023. However, there is a slight decline to 89,906 million US dollars in 2024. The sharp increase between 2022 and 2023 suggests substantial enhancement in shareholder value during that period, while the marginal decrease in 2024 may indicate a stabilization or minor setback in value creation.
- Invested Capital
- Invested capital shows a gradual increase from 27,450 million US dollars in 2020, reaching 31,924 million US dollars by 2024. This steady growth in invested capital reflects ongoing investment activities, albeit at a much slower pace compared to the growth in market value added.
- MVA Spread Ratio
- The MVA spread ratio, expressed as a percentage, rises markedly from 124.83% in 2020 to 289.43% in 2023, before slightly declining to 281.62% in 2024. This ratio indicates the efficiency with which invested capital is generating market value added. The pronounced increase over the years signals enhanced returns on invested capital and stronger value creation, while the slight decrease in 2024 aligns with the observed dip in MVA.
Overall, the company has demonstrated significant improvement in market value relative to its invested capital over the reviewed period, particularly between 2022 and 2023. The modest declines in both market value added and MVA spread ratio in the final year suggest the need for monitoring to ensure sustained performance.
MVA Margin
Eaton Corp. plc, 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 | ||||||
| Net sales | ||||||
| Add: Increase (decrease) in deferred revenue liabilities | ||||||
| Adjusted net sales | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
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 net sales
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial data reveals notable developments across several key indicators over the five-year period ending in 2024.
- Market Value Added (MVA)
-
The Market Value Added, measured in US$ millions, demonstrates a generally strong upward trajectory with a substantive increase from 34,267 in 2020 to a peak of 91,392 in 2023. This represents a substantial enhancement in the company’s market valuation over the four-year span. However, a slight decline is observed in 2024, where MVA decreases to 89,906, indicating a minor contraction but still maintaining a significantly elevated level compared to the early years.
- Adjusted Net Sales
-
Adjusted net sales have shown consistent growth throughout the period, rising from 17,881 million US dollars in 2020 to 24,870 million US dollars in 2024. This steady increase reflects continuous expansion in sales revenue, with the annual increments suggesting ongoing demand and potentially successful business strategies contributing to revenue enhancement.
- MVA Margin (%)
-
The MVA margin, expressed as a percentage, supports the trends observed in Market Value Added and adjusted net sales. It increased moderately from 191.64% in 2020 to 221.57% in 2022. A sharp surge is evident in 2023 where the margin jumps to 392%, followed by a slight decrease to 361.5% in 2024. Despite the reduction in the last year, the margin remains substantially elevated compared to the early periods, indicating improved efficiency in generating market value relative to sales.
Overall, the data indicates significant growth in market value and sales, with efficiency enhancements highlighted by the MVA margin. The peak in 2023 across MVA and MVA margin, followed by slight declines in 2024, might warrant further monitoring to determine whether this represents a temporary fluctuation or the beginning of a new trend.