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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General Motors Co. pages available for free this week:
- Balance Sheet: Assets
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Return on Assets (ROA) since 2010
- Total Asset Turnover since 2010
- Analysis of Revenues
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MVA
General Motors 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 »
The financial data reveals several notable trends over the five-year period ending in 2024.
- Market (fair) value
- The market value of the company shows a general decline from 192,380 million USD in 2020 to a low of 158,960 million USD in 2022. Thereafter, a modest recovery is evident, with the value increasing to 176,472 million USD by 2024. Despite this partial rebound, the market value in 2024 remains below the 2020 level, indicating a subdued overall market valuation trend.
- Invested capital
- Invested capital demonstrates consistent growth throughout the period, rising steadily from 152,793 million USD in 2020 to 194,168 million USD in 2024. This continuous increase suggests ongoing investment in the company’s capital base, reflecting expansion, asset acquisition, or reinvestment initiatives.
- Market value added (MVA)
- Market value added, representing the difference between market value and invested capital, exhibits a significant downward trajectory. The positive MVA of 39,587 million USD in 2020 diminishes sharply to 23,656 million USD in 2021 and turns negative in 2022 at -13,168 million USD. The negative trend continues in 2023 and 2024, with values of -19,527 million USD and -17,696 million USD respectively. This shift from positive to negative MVA suggests that the market values the company's capital investments less favorably over time, implying diminishing returns or concerns about future profitability compared to the invested capital.
Overall, the data indicates a company experiencing falling market valuation relative to steadily increasing capital investment, culminating in negative market value added in recent years. This pattern may point to challenges in generating sufficient market returns on invested capital despite ongoing growth in capital deployment.
MVA Spread Ratio
General Motors 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 | ||||||
| Ford Motor 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 shows a declining trend over the periods. It started at a positive value of 39,587 million US dollars in 2020 and dropped significantly to 23,656 million US dollars in 2021. From 2022 onwards, the MVA turned negative and continued to deteriorate, reaching -13,168 million US dollars in 2022, -19,527 million US dollars in 2023, and slightly improving but remaining negative at -17,696 million US dollars in 2024. This indicates a persistent loss in value over invested capital in the latter years.
- Invested Capital
- Invested capital demonstrates a steady increase each year. Starting at 152,793 million US dollars in 2020, it rose to 167,086 million US dollars in 2021, continued growing to 172,128 million US dollars in 2022, further increased to 182,260 million US dollars in 2023, and reached 194,168 million US dollars in 2024. This consistent rise suggests ongoing investment or reinvestment into the company's capital base.
- MVA Spread Ratio (%)
- The MVA spread ratio reflects a downward trajectory over the reviewed period. Beginning at 25.91% in 2020, it declined sharply to 14.16% in 2021. The ratio then moved into negative territory from 2022 onward, with values of -7.65% in 2022, -10.71% in 2023, and slightly improving to -9.11% in 2024. This negative spread ratio highlights increasing challenges in generating returns above the cost of invested capital during the latter years.
MVA Margin
General Motors 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 | ||||||
| Automotive net sales and revenue | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted automotive net sales and revenue | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Ford Motor 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 automotive net sales and revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The MVA demonstrates a significant declining trend over the five-year period. Starting from a positive value of 39,587 million US dollars in 2020, it fell sharply to 23,656 million in 2021. From 2022 onwards, the MVA turned negative, reaching -13,168 million and continuing to deteriorate to -19,527 million in 2023, with a slight recovery to -17,696 million in 2024. This shift from positive to negative MVA indicates a decrease in value generated beyond the capital invested, reflecting potential challenges in creating shareholder wealth.
- Adjusted Automotive Net Sales and Revenue
- There is a consistent upward trend in net sales and revenue throughout the period. Sales increased from 108,324 million US dollars in 2020 to 173,096 million in 2024, representing steady growth each year. This indicates successful expansion in revenue generation capacity, likely driven by factors such as increased sales volume, pricing strategies, or market expansion.
- MVA Margin
- The MVA margin mirrors the pattern observed in the absolute MVA values. It declined from a strong positive margin of 36.55% in 2020 to 20.89% in 2021. Subsequently, the margin turned negative from 2022 onward, reaching -9.11%, -12.25%, and -10.22% in 2022, 2023, and 2024 respectively. This negative margin suggests that the company’s market value is not growing in proportion to its revenue, indicating possible inefficiencies or cost pressures impacting overall profitability relative to invested capital.
- Overall Analysis
- Despite the steady increase in adjusted automotive net sales and revenue over the five years, the declining and ultimately negative MVA and MVA margin suggest a divergence between revenue growth and value creation for shareholders. The negative MVA values in recent years highlight concerns about the company’s ability to generate returns above its cost of capital. This could be attributable to rising costs, competitive pressures, or structural changes in the automotive sector affecting economic profitability. Close monitoring of operational efficiencies, cost management, and strategic initiatives would be essential to reverse these trends.