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
Edwards Lifesciences Corp., MVA calculation
US$ in thousands
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
A consistent and significant expansion in shareholder value is evident between 2017 and 2021. The primary driver of this trend is a substantial increase in the market value of the entity, which far outpaced the growth of invested capital, resulting in a rapidly ascending Market Value Added (MVA).
- Market Value Trajectory
- The fair market value experienced uninterrupted growth throughout the five-year period, rising from 28,146,312 thousand US$ in 2017 to 65,562,437 thousand US$ by 2021. This represents a total increase of approximately 133%, indicating strong and sustained investor confidence in the company's future earnings potential and strategic direction.
- Invested Capital Stability
- Invested capital remained relatively stable in comparison to the market valuation. While there was a general upward trend from 2017 (2,855,739 thousand US$) to a peak in 2020 (3,937,900 thousand US$), a slight contraction occurred in 2021, with the value decreasing to 3,791,600 thousand US$. This suggests that the organization achieved significant value appreciation without requiring proportional increases in capital expenditure or funding.
- Market Value Added (MVA) Performance
- MVA demonstrated a strong positive correlation with the market value, growing from 25,290,573 thousand US$ in 2017 to 61,770,837 thousand US$ in 2021. The widening gap between the market value and the invested capital indicates that the company has created immense wealth for its shareholders above the cost of the capital employed. The accelerated growth in MVA suggests that the market perceives the company's internal value-creation processes as highly efficient.
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MVA Spread Ratio
Edwards Lifesciences Corp., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | 61,770,837) | 50,626,379) | 44,373,810) | 33,995,898) | 25,290,573) | |
| Invested capital2 | 3,791,600) | 3,937,900) | 3,697,400) | 2,904,204) | 2,855,739) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 1,629.15% | 1,285.62% | 1,200.14% | 1,170.58% | 885.61% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Abbott Laboratories | 266.78% | — | — | — | — | |
| Elevance Health Inc. | 116.25% | — | — | — | — | |
| Intuitive Surgical Inc. | 2,002.36% | — | — | — | — | |
| Medtronic PLC | 163.10% | — | — | — | — | |
| UnitedHealth Group Inc. | 265.59% | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2021 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 61,770,837 ÷ 3,791,600 = 1,629.15%
4 Click competitor name to see calculations.
Between 2017 and 2021, a consistent and significant expansion in market-based value creation was observed. The financial figures indicate that the premium the market assigns to the company over its invested capital grew aggressively, reflecting strong investor confidence and increasing perceived future profitability.
- Market Value Added (MVA)
- A sustained upward trajectory is evident, with MVA increasing from 25,290,573 thousand US dollars in 2017 to 61,770,837 thousand US dollars by 2021. This represents a growth of approximately 144% over the five-year period, demonstrating a substantial increase in shareholder wealth creation.
- Invested Capital
- Invested capital remained relatively stable in comparison to the growth of MVA. After increasing from 2,855,739 thousand US dollars in 2017 to a peak of 3,937,900 thousand US dollars in 2020, a slight contraction to 3,791,600 thousand US dollars occurred in 2021. This suggests that the increase in market value was not driven by proportional increases in capital investment.
- MVA Spread Ratio
- The MVA spread ratio exhibited a strong and continuous increase, rising from 885.61% in 2017 to 1,629.15% in 2021. The most significant acceleration occurred between 2020 and 2021, where the ratio grew by approximately 343.53 percentage points. This trend indicates an intensifying divergence between the market's valuation of the company and the actual capital employed to generate that value, signifying exceptional capital efficiency.
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MVA Margin
Edwards Lifesciences Corp., MVA margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | 61,770,837) | 50,626,379) | 44,373,810) | 33,995,898) | 25,290,573) | |
| Net sales | 5,232,500) | 4,386,300) | 4,348,000) | 3,722,800) | 3,435,300) | |
| Performance Ratio | ||||||
| MVA margin2 | 1,180.52% | 1,154.19% | 1,020.56% | 913.18% | 736.20% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Abbott Laboratories | 384.46% | — | — | — | — | |
| Elevance Health Inc. | 54.23% | — | — | — | — | |
| Intuitive Surgical Inc. | 1,575.51% | — | — | — | — | |
| Medtronic PLC | 391.27% | — | — | — | — | |
| UnitedHealth Group Inc. | 130.39% | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 MVA. See details »
2 2021 Calculation
MVA margin = 100 × MVA ÷ Net sales
= 100 × 61,770,837 ÷ 5,232,500 = 1,180.52%
3 Click competitor name to see calculations.
Between December 31, 2017, and December 31, 2021, there was a consistent and significant upward trajectory in both absolute market value creation and the efficiency of that creation relative to sales.
- Market Value Added (MVA)
- MVA exhibited steady growth over the five-year period, rising from 25,290,573 thousand US dollars in 2017 to 61,770,837 thousand US dollars in 2021. This represents a substantial increase in the premium that the market assigns to the company over its invested capital, reflecting strong investor confidence in the organization's ability to generate value.
- Net Sales Performance
- Net sales demonstrated a positive trend, increasing from 3,435,300 thousand US dollars in 2017 to 5,232,500 thousand US dollars by the end of 2021. While sales growth was consistent, the magnitude of the increase was lower than the growth observed in the MVA.
- MVA Margin Analysis
- The MVA margin experienced an uninterrupted annual increase, climbing from 736.20% in 2017 to 1,180.52% in 2021. This expansion indicates that the market valuation grew at a significantly faster rate than the top-line revenue. Such a trend suggests that the market is attributing higher value to the company's future growth prospects and strategic positioning rather than solely to its current sales volume.
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