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
- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Reportable Segments
- Enterprise Value (EV)
- Capital Asset Pricing Model (CAPM)
- Net Profit Margin since 2005
- Total Asset Turnover since 2005
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MVA
Ford Motor Co., 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 »
- Market (fair) value of Ford
- The market value exhibited fluctuation over the five-year period. It started at 190,102 million USD in 2020, slightly decreased to 188,607 million USD in 2021, followed by a more pronounced decline to 171,002 million USD in 2022. The value rebounded to 187,763 million USD in 2023 before experiencing a minor drop to 183,876 million USD in 2024. This pattern reflects volatility with an overall slight downward trend from 2020 to 2024.
- Invested capital
- Invested capital showed a general upward trend throughout the period. The figure declined from 170,559 million USD in 2020 to 160,105 million USD in 2021 but then consistently increased in subsequent years reaching 186,730 million USD in 2024. This steady rise after 2021 suggests ongoing investments or capital expenditures contributing to growth in the asset base.
- Market value added (MVA)
- The MVA experienced significant variability. It increased notably from 19,543 million USD in 2020 to a peak of 28,502 million USD in 2021, indicating substantial value creation over invested capital in that year. Subsequently, MVA declined sharply to 6,784 million USD in 2022, partially recovered to 13,778 million USD in 2023, but turned negative to -2,854 million USD in 2024. The negative MVA in 2024 suggests that the market value was below the invested capital, reflecting a potential erosion of shareholder value or market concerns.
- Overall insights
- Over the analyzed period, the company experienced fluctuating market valuations accompanied by a rising trend in invested capital. The diminishing and eventually negative MVA toward 2024 highlights challenges in maintaining market value relative to invested capital. While invested capital growth indicates continued investment, market performance suggests investor caution or negative sentiment affecting valuation, especially in the latest year analyzed.
MVA Spread Ratio
Ford Motor Co., 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 | ||||||
| General Motors Co. | ||||||
| Tesla Inc. | ||||||
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.
- Market Value Added (MVA)
- The Market Value Added demonstrates significant volatility over the observed period. Initially, there is a notable increase from 19,543 million USD at the end of 2020 to a peak of 28,502 million USD by the end of 2021. However, this is followed by a sharp decline in 2022 to 6,784 million USD, indicating a considerable reduction in market value creation. Although there is a modest recovery to 13,778 million USD in 2023, the MVA turns negative in 2024, reaching -2,854 million USD, signaling that the company’s market value has fallen below the invested capital during this period.
- Invested Capital
- The invested capital shows a generally increasing trend. Starting at 170,559 million USD at the end of 2020, it decreases slightly in 2021 to 160,105 million USD but then rises steadily over the next three years, reaching 186,730 million USD by the end of 2024. This reflects ongoing investment and expansion efforts despite fluctuations in market value added.
- MVA Spread Ratio
- The MVA spread ratio, expressed in percentage terms, mirrors the fluctuations observed in MVA. It reaches a high of 17.8% in 2021, suggesting strong value generation relative to invested capital during that year. This ratio declines sharply to 4.13% in 2022, improves moderately to 7.92% in 2023, but then turns negative in 2024, settling at -1.53%. The negative ratio indicates that the returns on invested capital were insufficient to create market value in the most recent year.
- Overall Analysis
- Overall, the data reveals a period marked by initial strong market value creation followed by a setback beginning in 2022. Despite increasing invested capital, the decline and eventual negativity in MVA and MVA spread ratio during 2024 signal operational or market challenges adversely impacting value creation. This divergence between rising capital investment and shrinking market value added suggests the need for strategic reassessment to enhance profitability and capital efficiency.
MVA Margin
Ford Motor Co., 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 | ||||||
| Company revenues excluding Ford Credit | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted company revenues excluding Ford Credit | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| General Motors Co. | ||||||
| Tesla Inc. | ||||||
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 company revenues excluding Ford Credit
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added exhibited significant fluctuations over the observed period. Starting at $19,543 million in 2020, MVA increased notably to $28,502 million in 2021, indicating enhanced market perception or value creation. However, it sharply declined in 2022 to $6,784 million, showing a considerable decrease in value enhancement. A partial recovery occurred in 2023 with MVA rising to $13,778 million, though it did not reach previous peak levels. In 2024, MVA turned negative at -$2,854 million, suggesting a diminution in market value and potential challenges in value generation or market confidence.
- Adjusted Company Revenues excluding Ford Credit
- Revenues demonstrated a consistent upward trend throughout the period. Beginning at $116,379 million in 2020, revenues increased each subsequent year, reaching $126,580 million in 2021, $149,334 million in 2022, and further rising to $166,180 million in 2023. The trajectory remained positive in 2024 with revenues amounting to $173,381 million. This steady growth reflects ongoing expansion or improved sales performance, independent of financing activities associated with Ford Credit.
- MVA Margin
- The MVA margin followed a pattern similar to the absolute MVA figures, indicating fluctuations in value creation efficiency relative to revenues. The margin was 16.79% in 2020 and increased to 22.52% in 2021, highlighting strong value addition relative to revenue. A pronounced decline occurred in 2022 to 4.54%, signaling diminishing efficiency or profitability. Although the margin improved to 8.29% in 2023, it remained substantially below earlier highs. In 2024, the margin turned negative at -1.65%, coinciding with the negative MVA and potentially reflecting underlying operational or market challenges affecting profitability.
- Overall Insights
- The data illustrate a company experiencing consistent revenue growth while facing volatility in market value added and profitability efficiency. The sharp decline and eventual negativity in MVA and MVA margin despite rising revenues suggest that increased revenues did not translate into corresponding value creation or shareholder wealth enhancement in the later years. This divergence warrants further investigation into cost structures, market conditions, or strategic factors affecting value generation despite top-line growth.