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 Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Present Value of Free Cash Flow to Equity (FCFE)
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
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MVA
International Business Machines Corp., 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 in market value and, consequently, market value added. The market value of the entity initially decreased between 2021 and 2022, before exhibiting substantial growth through 2024, followed by a decline in the most recent year observed.
- Market Value
- The market value experienced a decrease from US$170,588 million in 2021 to US$166,821 million in 2022, representing a contraction of approximately 2.2%. A strong recovery and expansion followed, with the market value reaching US$226,572 million in 2023 and further increasing to US$294,221 million in 2024. However, the latest year, 2025, shows a decrease to US$276,837 million, indicating a potential shift in market sentiment or performance.
- Invested Capital
- Invested capital decreased from US$109,734 million in 2021 to US$103,859 million in 2022. Subsequent years show a gradual increase, reaching US$112,743 million in 2023, US$111,877 million in 2024, and US$124,995 million in 2025. The growth in invested capital, while present, is less dramatic than the fluctuations observed in market value.
- Market Value Added (MVA)
- Market value added mirrored the trends in market value. It began at US$60,854 million in 2021 and increased to US$62,962 million in 2022. A substantial increase is then observed, with MVA reaching US$113,829 million in 2023 and peaking at US$182,344 million in 2024. The final year, 2025, shows a decrease in MVA to US$151,842 million, aligning with the decline in market value. The magnitude of the MVA increase between 2023 and 2024 suggests a period of significant value creation for stakeholders.
The relationship between market value and invested capital is reflected in the MVA figures. The substantial increase in MVA from 2022 to 2024 indicates that the entity generated value exceeding the capital invested, while the decrease in 2025 suggests a potential erosion of that value creation. Further investigation into the factors driving these fluctuations would be beneficial.
MVA Spread Ratio
International Business Machines Corp., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
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 a generally positive trajectory over the observed period, though with some fluctuation. Simultaneously, Invested Capital demonstrated a more stable pattern. The MVA spread ratio, calculated from these figures, reveals a significant increase followed by a moderation of that increase.
- Market Value Added (MVA)
- MVA began at US$60,854 million in 2021 and increased to US$62,962 million in 2022, representing modest growth. A substantial increase was then observed in 2023, reaching US$113,829 million. This growth continued into 2024, with MVA peaking at US$182,344 million. However, in 2025, MVA decreased to US$151,842 million, indicating a reversal of the prior year’s gains, though remaining significantly above the 2021 and 2022 levels.
- Invested Capital
- Invested Capital decreased from US$109,734 million in 2021 to US$103,859 million in 2022. It then recovered to US$112,743 million in 2023 and remained relatively stable at US$111,877 million in 2024. A further increase was noted in 2025, reaching US$124,995 million. The changes in Invested Capital appear less volatile than those observed in MVA.
- MVA Spread Ratio
- The MVA spread ratio, which reflects MVA as a percentage of Invested Capital, increased consistently from 55.46% in 2021 to 60.62% in 2022. The most dramatic increase occurred between 2022 and 2023, rising to 100.96%. This upward trend continued into 2024, reaching 162.99%. However, the ratio decreased in 2025 to 121.48%, aligning with the decline in MVA observed during that year. The ratio’s peak in 2024 suggests a period of particularly efficient value creation relative to invested capital, followed by a moderation in 2025.
The significant increase in the MVA spread ratio between 2022 and 2024 suggests that the company generated substantially more value for shareholders relative to the capital invested. The subsequent decrease in 2025, while still representing a high ratio, indicates a potential shift in this dynamic. Further investigation into the factors driving these changes in both MVA and Invested Capital would be beneficial.
MVA Margin
International Business Machines Corp., MVA margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred income | ||||||
| Adjusted revenue | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
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 revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
The Market Value Added (MVA) exhibited a generally positive trajectory over the five-year period, although with notable fluctuations. Adjusted revenue also demonstrated an upward trend, though at a more moderate pace. The MVA margin, calculated as MVA relative to adjusted revenue, reveals significant shifts in value creation efficiency.
- Market Value Added (MVA)
- The MVA increased from US$60,854 million in 2021 to US$62,962 million in 2022, representing modest growth. A substantial increase was then observed in 2023, with MVA reaching US$113,829 million. This growth accelerated further in 2024, peaking at US$182,344 million. However, in 2025, MVA experienced a decline to US$151,842 million, though remaining significantly above the levels recorded in 2021 and 2022.
- Adjusted Revenue
- Adjusted revenue consistently increased throughout the period. From US$57,707 million in 2021, it rose to US$59,966 million in 2022 and US$63,313 million in 2023. The rate of increase slowed slightly in 2024, with revenue remaining relatively stable at US$63,298 million. A more substantial increase was observed in 2025, reaching US$70,378 million.
- MVA Margin
- The MVA margin initially remained relatively stable, at 105.45% in 2021 and 105.00% in 2022. A dramatic increase occurred in 2023, with the margin rising to 179.79%. This upward trend continued in 2024, reaching a peak of 288.07%. The margin then decreased in 2025 to 215.75%, although it remained considerably higher than the values observed in the earlier years of the period. The substantial increases in the MVA margin suggest a growing efficiency in generating value from each dollar of adjusted revenue, followed by a partial reversion in the most recent year.
The divergence between the MVA and adjusted revenue trends, particularly evident in the MVA margin, indicates that factors beyond revenue growth are significantly influencing the company’s market valuation. The decline in MVA margin in 2025, despite continued revenue growth, warrants further investigation to determine the underlying causes.