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
HCA Healthcare Inc., MVA calculation
US$ in millions
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 sustained upward trend in Market Value Added (MVA) is evident between 2017 and 2021, reflecting a significant increase in shareholder wealth creation relative to the capital employed in operations.
- Market Value Appreciation
- The market value grew consistently over the five-year period, rising from 73,509 million USD in 2017 to 117,219 million USD by the end of 2021. This steady ascent indicates growing investor confidence and an increasing valuation of the entity's future earnings potential.
- Invested Capital Trends
- Invested capital exhibited a moderate and stable increase, moving from 27,635 million USD in 2017 to 36,837 million USD in 2021. The growth rate of the invested capital remained significantly lower than the growth rate of the market value, suggesting a high efficiency in capital utilization to drive valuation.
- Market Value Added (MVA) Expansion
- MVA grew from 45,874 million USD in 2017 to 80,382 million USD in 2021. As MVA represents the difference between the fair market value and the invested capital, the accelerated growth of this metric demonstrates that the market is valuing the organization substantially above its capital cost. The most pronounced year-over-year expansion occurred between 2020 and 2021, during which MVA increased by 14,475 million USD.
The overall trajectory indicates that value creation has outpaced capital expansion. The widening gap between market value and invested capital suggests that the organization has successfully enhanced its intrinsic value and market positioning over the analyzed period.
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MVA Spread Ratio
HCA Healthcare Inc., 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 millions) | ||||||
| Market value added (MVA)1 | 80,382) | 65,907) | 57,708) | 55,519) | 45,874) | |
| Invested capital2 | 36,837) | 34,570) | 33,534) | 29,729) | 27,635) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 218.21% | 190.65% | 172.09% | 186.75% | 166.00% | |
| 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 × 80,382 ÷ 36,837 = 218.21%
4 Click competitor name to see calculations.
The financial performance between December 31, 2017, and December 31, 2021, demonstrates a consistent expansion in shareholder value creation and market valuation relative to capital deployment.
- Market Value Added (MVA)
- A sustained upward trajectory is observed in the MVA, which increased from 45,874 million US$ in 2017 to 80,382 million US$ by 2021. This growth indicates that the market consistently attributed increasing value to the company over and above the total capital invested by shareholders and debt holders.
- Invested Capital
- Invested capital grew steadily from 27,635 million US$ in 2017 to 36,837 million US$ in 2021. This gradual increase suggests a consistent expansion of the operational asset base and capital investment strategy over the five-year period.
- MVA Spread Ratio
- The MVA spread ratio exhibited a general upward trend, rising from 166.00% in 2017 to a peak of 218.21% in 2021. Although a temporary contraction occurred in 2019, where the ratio declined to 172.09% from 186.75% in 2018, the subsequent recovery and growth indicate an increasing efficiency in generating market value relative to the capital employed.
The divergence between the steady growth of invested capital and the more rapid acceleration of MVA confirms a strengthening market premium. The overall increase in the MVA spread ratio suggests that the company is creating significant value beyond its cost of capital, reflecting improved investor confidence and operational effectiveness.
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MVA Margin
HCA Healthcare Inc., 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 millions) | ||||||
| Market value added (MVA)1 | 80,382) | 65,907) | 57,708) | 55,519) | 45,874) | |
| Revenues | 58,752) | 51,533) | 51,336) | 46,677) | 43,614) | |
| Performance Ratio | ||||||
| MVA margin2 | 136.82% | 127.89% | 112.41% | 118.94% | 105.18% | |
| 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 ÷ Revenues
= 100 × 80,382 ÷ 58,752 = 136.82%
3 Click competitor name to see calculations.
Financial performance between 2017 and 2021 is characterized by a consistent expansion in both market value added and total revenues, reflecting a strong trajectory of value creation relative to operational scale.
- Market Value Added (MVA)
- A sustained upward trend is observed in the MVA, which rose from 45,874 million US dollars in 2017 to 80,382 million US dollars by 2021. This growth indicates a substantial increase in the premium the market assigns to the company over its invested capital over the five-year period.
- Revenue Trends
- Revenues exhibited steady growth, increasing from 43,614 million US dollars in 2017 to 58,752 million US dollars in 2021. Although a period of relative stagnation occurred between 2019 and 2020, where revenues moved from 51,336 million to 51,533 million US dollars, a significant acceleration followed in 2021.
- MVA Margin Interpretation
- The MVA margin increased from 105.18% in 2017 to 136.82% in 2021. While a slight decline to 112.41% was recorded in 2019, the subsequent years showed a sharp recovery and expansion. The fact that the MVA margin grew more aggressively than revenue suggests that the market's valuation of the company's efficiency in creating value has improved more rapidly than its actual sales growth.
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