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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Estée Lauder Cos. Inc. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Current Ratio since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Revenues
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MVA
Estée Lauder Cos. Inc., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of Estée Lauder
- The market value of the company displayed a generally upward trend from June 2018 to June 2021, rising from $55,032 million to a peak of $132,817 million. This represents a strong growth phase over three years. However, following this peak, the market value experienced a significant decline in the subsequent two years, dropping to $102,947 million in June 2022 and further down to $66,599 million by June 2023. This indicates a notable market contraction after the peak in 2021.
- Invested capital
- The invested capital showed a steady increase over the entire period from June 2018 to June 2023. It rose from $10,334 million in 2018 to $17,123 million in 2023. Despite some fluctuations, this trend suggests ongoing investment and capital allocation to support the business operations over the years, with a slight dip observed between 2021 and 2022 before rising again in 2023.
- Market value added (MVA)
- The market value added, which represents the difference between market value and invested capital, reflected a similar trend to the market value itself. MVA increased substantially from $44,698 million in 2018 to a high of $117,207 million in 2021. Subsequently, it declined sharply to $88,373 million in 2022 and further to $49,476 million in 2023. This indicates that while the company was successfully creating significant value above invested capital until 2021, the value creation diminished significantly in the following two years.
MVA Spread Ratio
Estée Lauder Cos. Inc., MVA spread ratio calculation, comparison to benchmarks
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Market value added (MVA)1 | |||||||
| Invested capital2 | |||||||
| Performance Ratio | |||||||
| MVA spread ratio3 | |||||||
| Benchmarks | |||||||
| MVA Spread Ratio, Competitors4 | |||||||
| Procter & Gamble Co. | |||||||
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
1 MVA. See details »
2 Invested capital. See details »
3 2023 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added experienced significant growth from June 2018 to June 2021, rising from 44,698 million US dollars to a peak of 117,207 million US dollars. This reflects a substantial increase in the company's market value relative to its invested capital during this period. However, after reaching this peak, MVA declined sharply over the subsequent two years, falling to 49,476 million US dollars by June 2023, indicating reduced market valuation relative to prior years.
- Invested Capital
- Invested capital showed a generally upward trend across the entire period under review. Starting at 10,334 million US dollars in June 2018, it increased steadily year-over-year with a slight dip between June 2021 and June 2022. The invested capital reached its highest recorded value of 17,123 million US dollars by June 2023, suggesting continuous reinvestment or capital expansion efforts by the company.
- MVA Spread Ratio
- The MVA spread ratio, which represents the market value added as a percentage of invested capital, demonstrated a pattern similar to that of MVA. Beginning at 432.54% in June 2018, the ratio increased consistently to a maximum of 750.85% in June 2021. Following this peak, the ratio experienced a notable decline, dropping to 288.94% by June 2023. This decline suggests a diminishing rate of return on invested capital from a market valuation perspective during the final two years analyzed.
- Overall Trends and Insights
- The data depicts a period of strong growth in market valuation and returns on invested capital from 2018 through 2021, followed by a period of decline through 2023. The continuous increase in invested capital despite the falling market value added in recent years may indicate increased investments that have yet to be fully reflected in market valuation or potential challenges impacting market perception. The sharp reduction in the MVA spread ratio during the latter period warrants further investigation to assess underlying factors affecting market confidence or operational performance.
MVA Margin
Estée Lauder Cos. Inc., MVA margin calculation, comparison to benchmarks
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Market value added (MVA)1 | |||||||
| Net sales | |||||||
| Add: Increase (decrease) in deferred revenue | |||||||
| Adjusted net sales | |||||||
| Performance Ratio | |||||||
| MVA margin2 | |||||||
| Benchmarks | |||||||
| MVA Margin, Competitors3 | |||||||
| Procter & Gamble Co. | |||||||
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).
1 MVA. See details »
2 2023 Calculation
MVA margin = 100 × MVA ÷ Adjusted net sales
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added showed a general upward trend from June 2018 through June 2021, increasing from $44,698 million to a peak of $117,207 million. After 2021, a decline is observed, with the MVA decreasing to $88,373 million in 2022 and further dropping markedly to $49,476 million by June 2023. This indicates a significant reduction in the market's perceived added value in the most recent periods.
- Adjusted Net Sales
- Adjusted net sales experienced growth from $13,683 million in 2018 to $16,307 million in 2021, reflecting a steady increase over the first four years. Sales peaked at $17,728 million in 2022 before decreasing to $16,120 million in 2023. The sales figures present a less volatile trend compared to MVA, though a modest contraction was noticeable in the last year.
- MVA Margin
- The MVA margin, representing the ratio of market value added to net sales, displays a strong positive trend initially, rising from 326.67% in 2018 to a peak of 718.75% in 2021. This peak was followed by a notable decline in margin to 498.49% in 2022 and further down to 306.92% in 2023. The movement in this ratio suggests that while both market value added and sales grew initially, market value added outpaced sales significantly until 2021. However, subsequent declines in market value added have driven the margin down to levels close to those seen in 2018.