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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- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
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MVA
HP Inc., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of HP
- The market value displayed a fluctuating trend over the six-year period. It initially increased from approximately 78.4 billion US dollars in 2013 to a peak of around 95.3 billion in 2014. Subsequently, there was a significant decline in 2015 and 2016, reaching a low of approximately 34.4 billion in 2016. From 2016 onwards, the market value showed a slight recovery, rising to about 42.0 billion in 2017 before a marginal decrease to roughly 41.1 billion in 2018.
- Invested capital
- Invested capital demonstrated relative stability in the early years, with values around 67.5 billion and 65.8 billion in 2013 and 2014, respectively. In 2015, there was an increase to approximately 71.6 billion. However, a sharp drop occurred in 2016, falling drastically to just over 9 billion. There was a mild increase thereafter, with values nearing 9.8 billion in 2017, but then a decline again to about 7.6 billion in 2018. This pattern suggests a major restructuring or divestment event impacting the invested capital starting in 2016.
- Market value added (MVA)
- The MVA exhibited considerable volatility. Initially, it improved substantially from roughly 11.0 billion in 2013 to nearly 29.5 billion in 2014. In 2015, the MVA turned negative, dropping sharply to approximately -22.7 billion, indicating that the market value fell below the invested capital during that year. The subsequent years saw a strong positive recovery, with MVA rising to around 25.4 billion in 2016 and continuing upward to about 33.6 billion in 2018, signifying enhanced value creation relative to invested capital.
MVA Spread Ratio
HP Inc., MVA spread ratio calculation, comparison to benchmarks
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Market value added (MVA)1 | |||||||
| Invested capital2 | |||||||
| Performance Ratio | |||||||
| MVA spread ratio3 | |||||||
| Benchmarks | |||||||
| MVA Spread Ratio, Competitors4 | |||||||
| Apple Inc. | |||||||
| Arista Networks Inc. | |||||||
| Cisco Systems Inc. | |||||||
| Dell Technologies Inc. | |||||||
| Super Micro Computer Inc. | |||||||
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31).
1 MVA. See details »
2 Invested capital. See details »
3 2018 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added exhibits considerable volatility over the analyzed periods. It started at a positive value of 10,977 million USD in 2013, surged significantly to 29,506 million USD in 2014, then dropped sharply to a negative value of -22,691 million USD in 2015. Subsequently, MVA rebounded to positive figures of 25,376 million USD in 2016, 32,285 million USD in 2017, and continued its upward trend to 33,562 million USD in 2018. This pattern indicates a period of substantial instability in market valuation around 2015, followed by recovery and growth in subsequent years.
- Invested Capital
- Invested capital remained relatively steady from 2013 to 2015, ranging from approximately 65,787 to 71,569 million USD. However, there is a dramatic decrease beginning in 2016, where the invested capital plunged to 9,027 million USD. This reduced level continued with minor fluctuations, recorded as 9,763 million USD in 2017 and 7,561 million USD in 2018. The sharp decline post-2015 suggests a major structural change in the company's asset base or capital allocation strategy.
- MVA Spread Ratio
- The MVA spread ratio displays a pattern similar to the Market Value Added, indicating high sensitivity to the changes in market value relative to invested capital. It ranged from 16.27% in 2013, increased significantly to 44.85% in 2014, then turned deeply negative at -31.7% in 2015, indicating negative returns on invested capital for that year. In contrast, it sharply increased to 281.12% in 2016 and continued to improve to 330.68% in 2017 and 443.87% in 2018. The large values in the last three years suggest an exceptionally high return on invested capital, likely influenced by the much lower base of invested capital.
MVA Margin
HP Inc., MVA margin calculation, comparison to benchmarks
| Oct 31, 2018 | Oct 31, 2017 | Oct 31, 2016 | Oct 31, 2015 | Oct 31, 2014 | Oct 31, 2013 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Market value added (MVA)1 | |||||||
| Net revenue | |||||||
| Add: Increase (decrease) in deferred revenue | |||||||
| Adjusted net revenue | |||||||
| Performance Ratio | |||||||
| MVA margin2 | |||||||
| Benchmarks | |||||||
| MVA Margin, Competitors3 | |||||||
| Apple Inc. | |||||||
| Arista Networks Inc. | |||||||
| Cisco Systems Inc. | |||||||
| Dell Technologies Inc. | |||||||
| Super Micro Computer Inc. | |||||||
Based on: 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31).
1 MVA. See details »
2 2018 Calculation
MVA margin = 100 × MVA ÷ Adjusted net revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA) Trends
- The Market Value Added experienced significant fluctuations during the examined periods. Initially, there was a strong increase from 10,977 million USD in 2013 to 29,506 million USD in 2014. However, 2015 showed a marked decline with a negative MVA of -22,691 million USD, indicating value destruction during that year. Subsequently, the MVA rebounded substantially to 25,376 million USD in 2016 and continued rising in the following years, reaching 33,562 million USD by 2018. This pattern suggests periods of volatility but an overall positive recovery and growth in shareholder value towards the end of the period.
- Adjusted Net Revenue Trends
- Adjusted net revenue displayed a declining trend from 2013 to 2016, dropping from 111,817 million USD to 48,159 million USD. This represented a substantial reduction over three years. After 2016, the revenue figures showed a gradual recovery, increasing to 52,205 million USD in 2017 and further to 58,639 million USD in 2018. Despite the partial recovery, the adjusted net revenue in 2018 remained significantly lower than the levels seen in 2013 and 2014.
- MVA Margin Trends
- The MVA margin reflected similar volatility to the MVA values, with a positive margin of 9.82% in 2013 increasing sharply to 26.55% in 2014. In 2015, there was a sharp negative margin of -21.85%, indicative of value loss during that year. This was followed by an impressive increase to 52.69% in 2016 and further growth through 2017, peaking at 61.84%. In 2018, a slight decline occurred, bringing the margin down to 57.24%. Overall, the margin indicates that while value creation was inconsistent, the latter years showed strong efficiency in generating market value relative to revenue.