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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- Common-Size Income Statement
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Return on Assets (ROA) since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
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MVA
GE Aerospace, 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 period under review demonstrates significant fluctuations and ultimately substantial growth in market value added (MVA). The market value of the entity experienced an initial decline followed by a robust recovery and expansion, while invested capital consistently decreased before stabilizing. These movements have a direct impact on the calculated MVA.
- Market Value Trend
- The market value decreased from US$151,810 million in 2021 to US$123,573 million in 2022, representing a decline. However, a strong upward trend commenced in 2023, with the market value reaching US$172,464 million, and continued through 2025, culminating in US$335,290 million. This indicates a substantial increase in investor confidence and perceived value over the latter part of the period.
- Invested Capital Trend
- Invested capital exhibited a consistent downward trend from 2021 to 2024, decreasing from US$72,026 million to US$37,678 million. This suggests a reduction in the amount of capital employed by the entity. In 2025, invested capital showed a slight increase to US$38,668 million, indicating a potential stabilization of capital deployment.
- Market Value Added (MVA) Analysis
- MVA mirrored the trend in market value, initially decreasing from US$79,784 million in 2021 to US$56,731 million in 2022. A significant recovery began in 2023, with MVA rising to US$122,270 million, and continued to increase substantially through 2025, reaching US$296,622 million. This growth in MVA suggests the entity is generating value for its investors beyond the cost of capital.
- The widening gap between market value and invested capital, as reflected in the increasing MVA, implies improved efficiency in capital utilization and/or enhanced profitability. The stabilization of invested capital in 2025, coupled with continued growth in market value, further supports this conclusion.
Overall, the period demonstrates a turnaround in performance. While initial declines were observed in both market value and invested capital, the subsequent recovery and expansion of market value, coupled with a stabilization of invested capital, resulted in a substantial increase in MVA, indicating successful value creation.
MVA Spread Ratio
GE Aerospace, MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| 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 significant fluctuations over the observed period. Initially decreasing, it demonstrated substantial growth in subsequent years. Simultaneously, Invested Capital consistently declined. Consequently, the MVA spread ratio experienced a dramatic increase, indicating a widening gap between the wealth created and the capital employed.
- Market Value Added (MVA)
- The MVA decreased from US$79,784 million in 2021 to US$56,731 million in 2022, representing a decline of approximately 28.8%. However, a strong recovery followed, with MVA increasing to US$122,270 million in 2023, US$201,523 million in 2024, and reaching US$296,622 million in 2025. This represents a cumulative increase of over 271% from 2022 to 2025.
- Invested Capital
- Invested Capital showed a consistent downward trend throughout the period. It decreased from US$72,026 million in 2021 to US$66,842 million in 2022, US$50,194 million in 2023, US$37,678 million in 2024, and stabilized at US$38,668 million in 2025. The overall reduction in Invested Capital from 2021 to 2025 was approximately 46.5%.
- MVA Spread Ratio
- The MVA spread ratio reflects the relationship between MVA and Invested Capital. It began at 110.77% in 2021, decreased to 84.87% in 2022, then experienced exponential growth. The ratio increased to 243.60% in 2023, 534.86% in 2024, and peaked at 767.10% in 2025. This substantial increase suggests that the company is generating significantly more value relative to the capital it has invested. The accelerating trend indicates increasing efficiency in value creation.
The combination of decreasing invested capital and increasing MVA resulted in a rapidly expanding MVA spread ratio. This suggests improved capital efficiency and a stronger ability to generate wealth for stakeholders. The trend warrants further investigation to understand the drivers behind both the MVA growth and the reduction in invested capital.
MVA Margin
GE Aerospace, MVA margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Sales of equipment and services | ||||||
| Add: Increase (decrease) in deferred income | ||||||
| Adjusted sales of equipment and services | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| 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 sales of equipment and services
= 100 × ÷ =
3 Click competitor name to see calculations.
The Market Value Added (MVA) exhibited significant fluctuations between 2021 and 2025. Initially decreasing, it demonstrated substantial growth in subsequent periods. Simultaneously, Adjusted Sales of Equipment and Services experienced a decline, particularly from 2022 onwards, though with a slight recovery towards the end of the analyzed timeframe. The MVA margin, calculated as a percentage, reflects these movements, showing a dramatic increase over the five-year period.
- Market Value Added (MVA)
- In 2021, the MVA stood at US$79,784 million. A decrease was observed in 2022, falling to US$56,731 million. However, 2023 marked a strong recovery, with the MVA rising to US$122,270 million. This upward trajectory continued through 2024 and 2025, reaching US$201,523 million and US$296,622 million respectively. This indicates a growing investor perception of value creation over time, despite initial setbacks.
- Adjusted Sales of Equipment and Services
- Adjusted Sales began at US$71,356 million in 2021 and increased modestly to US$73,736 million in 2022. A decline then commenced, with sales decreasing to US$64,504 million in 2023. This downward trend accelerated in 2024, with sales falling to US$35,098 million. A slight recovery was noted in 2025, with sales reaching US$42,332 million, though remaining significantly below the 2021 and 2022 levels. The decreasing sales trend suggests potential challenges in revenue generation.
- MVA Margin
- The MVA margin initially stood at 111.81% in 2021. It decreased substantially in 2022 to 76.94%. A significant increase was then observed in 2023, reaching 189.55%. This growth accelerated dramatically in 2024, with the margin soaring to 574.17%. The upward trend continued into 2025, culminating in a margin of 700.70%. The substantial increase in the MVA margin, despite declining sales, suggests that the company is becoming increasingly efficient at generating value from its sales, or that market expectations have shifted significantly. The increasing margin indicates a disproportionate increase in market value relative to sales.
The divergence between the MVA and Adjusted Sales trends is noteworthy. While sales decreased, the MVA and, consequently, the MVA margin increased substantially. This suggests factors beyond sales volume are significantly influencing market valuation, such as improved profitability, reduced risk perception, or positive market sentiment.