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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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Net Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Total Asset Turnover since 2005
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MVA
Eaton Corp. plc, MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Fair value of debt. See details »
2 Invested capital. See details »
The market value of the company demonstrates a generally positive trajectory over the five-year period. While experiencing a slight decrease between 2023 and 2024, the value ultimately concludes the period at its highest point. Invested capital exhibits a consistent, albeit modest, increase annually. Market value added (MVA) mirrors the overall trend of the market value, showing substantial growth throughout the period, with a minor dip between 2023 and 2024 before reaching a peak in 2025.
- Market Value Trend
- The market value increased from US$69,014 million in 2021 to US$155,543 million in 2025. The most significant increase occurred between 2022 and 2023, nearly doubling in value. A slight contraction was observed between 2023 and 2024, decreasing to US$121,830 million, but this was subsequently recovered with growth in 2025.
- Invested Capital Trend
- Invested capital shows a steady upward trend, increasing from US$29,709 million in 2021 to US$34,920 million in 2025. The annual increases are relatively consistent, averaging approximately US$1.1 billion per year. This indicates a continuous reinvestment in the business.
- Market Value Added (MVA) Trend
- MVA experienced substantial growth, rising from US$39,305 million in 2021 to US$120,623 million in 2025. Similar to the market value, the largest increase in MVA occurred between 2022 and 2023. The decrease from 2023 to 2024 in MVA (from US$91,392 million to US$89,906 million) corresponds with the decrease in market value during the same period, and was then followed by a strong recovery in 2025.
The consistent growth in MVA, exceeding the growth in invested capital, suggests that the company is generating value for its investors at an increasing rate. The slight dip in 2024 for both market value and MVA warrants further investigation, but the subsequent recovery in 2025 indicates resilience and continued value creation.
MVA Spread Ratio
Eaton Corp. plc, MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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: 2025-12-31), 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).
1 MVA. See details »
2 Invested capital. See details »
3 2025 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The Market Value Added (MVA) exhibited a consistent upward trajectory over the five-year period, although the rate of increase fluctuated. Simultaneously, Invested Capital demonstrated a more moderate, steady growth pattern. The MVA spread ratio, calculated as a percentage, reveals a significant expansion relative to Invested Capital, indicating increasing shareholder value creation beyond the capital employed.
- Market Value Added (MVA)
- MVA increased from US$39,305 million in 2021 to US$120,623 million in 2025. The most substantial year-over-year increase occurred between 2022 and 2023, with an addition of US$45,221 million. While growth continued into 2024, it decelerated slightly before resuming a stronger pace in 2025.
- Invested Capital
- Invested Capital showed a consistent, albeit less dramatic, increase, moving from US$29,709 million in 2021 to US$34,920 million in 2025. The annual increments were relatively stable, ranging between approximately US$600 million and US$1,400 million each year. This suggests a measured approach to capital allocation.
- MVA Spread Ratio
- The MVA spread ratio experienced substantial growth throughout the period. Starting at 132.30% in 2021, it rose to 345.43% in 2025. The largest percentage point increase was observed between 2022 and 2023 (140.04 percentage points), mirroring the significant increase in MVA during that year. The ratio peaked in 2025, indicating that MVA was more than 3.45 times greater than the Invested Capital. The ratio experienced a slight decrease between 2023 and 2024, but quickly recovered and surpassed the previous high.
The widening MVA spread ratio suggests that the company is becoming increasingly efficient at generating value from its invested capital. The substantial growth in MVA, coupled with the relatively stable growth in Invested Capital, points to improved profitability and/or enhanced market expectations regarding future performance.
MVA Margin
Eaton Corp. plc, MVA margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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: 2025-12-31), 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).
1 MVA. See details »
2 2025 Calculation
MVA margin = 100 × MVA ÷ Adjusted net sales
= 100 × ÷ =
3 Click competitor name to see calculations.
The Market Value Added (MVA) exhibited a consistent upward trajectory over the five-year period, although the rate of increase fluctuated. Simultaneously, Adjusted Net Sales also demonstrated growth, but at a considerably slower pace. Consequently, the MVA margin experienced substantial volatility, reflecting the disproportionate growth between MVA and sales.
- Market Value Added (MVA)
- MVA increased from US$39,305 million in 2021 to US$120,623 million in 2025. The most significant increase occurred between 2022 and 2023, with an addition of US$45,221 million. While growth continued in 2024, it was less pronounced, followed by a further substantial increase in 2025.
- Adjusted Net Sales
- Adjusted Net Sales rose steadily from US$19,793 million in 2021 to US$27,753 million in 2025. The annual increases were relatively consistent, ranging from approximately US$1,045 million to US$2,873 million. This indicates a stable, albeit moderate, growth in revenue generation.
- MVA Margin
- The MVA margin showed a dramatic increase from 198.58% in 2021 to 221.57% in 2022. This trend continued sharply in 2023, reaching 392.00%. A decrease was observed in 2024, with the margin falling to 361.50%, before rebounding to 434.63% in 2025. The substantial fluctuations suggest that changes in market perception and investor expectations regarding the company’s future prospects had a significant impact on its valuation, exceeding the impact of sales growth. The margin’s sensitivity to MVA growth, relative to sales, is particularly noteworthy.
In summary, while both MVA and Adjusted Net Sales increased over the period, the MVA margin’s pronounced volatility indicates that the company’s market value is being driven more by factors beyond its core sales performance. The significant increases in MVA margin suggest positive shifts in investor sentiment and expectations, but the fluctuations warrant continued monitoring to understand the underlying drivers and potential risks.