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
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Analysis of Debt
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MVA
Marathon Oil Corp., 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 »
- Market (fair) value trend
- The market value exhibited relative stability from 2017 to 2018, with a slight increase from 18,981 million USD to 19,306 million USD. This was followed by a notable decline in 2019 to 14,539 million USD. From 2019 onwards, the market value showed moderate recovery in 2020, reaching 15,020 million USD, and then a significant increase in 2021 to 20,794 million USD, the highest during the period observed.
- Invested capital trend
- The invested capital remained relatively stable between 2017 and 2019, fluctuating narrowly around mid-17,000 million USD. However, from 2019 to 2021, invested capital showed a downward trend, decreasing steadily from 17,954 million USD in 2019 to 16,214 million USD in 2020 and further down to 14,862 million USD in 2021. This indicates a reduction in capital investment over the latter years.
- Market value added (MVA) trend
- Market value added showed a positive performance in 2017 and 2018, increasing from 1,255 million USD to 1,741 million USD. However, the metric turned negative in 2019 to -3,415 million USD and remained negative in 2020, though less severe at -1,194 million USD. In 2021, MVA rebounded strongly to 5,932 million USD, suggesting increased market valuation relative to invested capital.
- Overall insights
- The data indicates a period of relative stability and growth until 2018, followed by a downturn in 2019 that affected both market value and MVA significantly. The reduction in invested capital in 2020 and 2021 corresponds with a recovery and subsequent growth in market value and MVA, suggesting improved market perceptions or operational performance during that period. The increasing market value coupled with decreasing invested capital and rising MVA in 2021 may reflect enhanced efficiency or favorable market conditions contributing to value creation.
MVA Spread Ratio
Marathon Oil Corp., 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 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
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 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added exhibited significant variability over the analyzed period. Starting at 1,255 million US dollars at the end of 2017, it increased to 1,741 million in 2018, indicating a positive value creation. However, there was a notable decline in 2019, where MVA fell sharply to a negative 3,415 million, reflecting a substantial value erosion. This negative trend continued into 2020 with an MVA of -1,194 million, although this represents a partial recovery relative to 2019. By the end of 2021, MVA recovered strongly to a positive 5,932 million, the highest value in the given period, suggesting a significant turnaround in market valuation.
- Invested Capital
- Invested capital showed a gradual downward trend across the years. Beginning at 17,726 million US dollars at the end of 2017, it remained relatively stable through 2018 and 2019 with slight increases to 17,565 and 17,954 million respectively. From 2019 onwards, invested capital declined more noticeably, dropping to 16,214 million in 2020 and further to 14,862 million in 2021. This represents a reduction in the company's invested capital base over the latter part of the period, possibly indicating divestitures, asset sales, or reduced capital expenditures.
- MVA Spread Ratio
- The MVA spread ratio, reflecting the percentage spread between the company's return on invested capital and its cost of capital, mirrored the volatility seen in MVA values. It started positively at 7.08% in 2017 and increased to 9.91% in 2018, reinforcing the perception of value creation. In 2019, the ratio turned sharply negative to -19.02%, indicative of returns falling significantly below capital costs. This negative stance continued into 2020 with a ratio of -7.36%, showing some improvement but remaining unfavorable. The trend reversed dramatically in 2021 with the spread ratio reaching 39.92%, a strong positive signal denoting substantial value generation and efficient utilization of capital during that year.
- Overall Trends and Insights
- The data suggests a turbulent period from 2017 to 2021, marked by initial moderate growth in market value and capital efficiency which peaked in 2018. Subsequently, a sharp deterioration occurred in 2019 and 2020, characterized by negative market value added and spread ratios, alongside a declining capital base. The turnaround in 2021 is significant, with considerable value creation and improved capital efficiency despite a further decrease in invested capital. This trend may indicate successful strategic adjustments or improved operational performance leading to enhanced investor perception and returns above capital costs during the final year analyzed.
MVA Margin
Marathon Oil Corp., 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 | ||||||
| Revenues | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
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 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The MVA shows notable fluctuations over the five-year period. Starting at $1,255 million in 2017, it increased to $1,741 million in 2018, indicating growth in value creation. However, there was a sharp reversal in 2019, with MVA dropping to -$3,415 million, signaling significant value destruction. In 2020, the negative trend continued but improved slightly to -$1,194 million. The year 2021 marked a significant recovery, with MVA rising substantially to $5,932 million, the highest level in the period analyzed.
- Revenues
- Revenues experienced variability during the timeframe. The value grew from $4,373 million in 2017 to $5,902 million in 2018, representing a solid increase. There was a decline in 2019 to $5,063 million, followed by a more pronounced drop to $3,097 million in 2020, likely influenced by challenging market conditions. By 2021, revenues rebounded to $5,601 million, nearing the 2018 peak but still below the highest recent level.
- MVA Margin
- The MVA margin mirrors the MVA trend closely. It started at 28.71% in 2017 and slightly increased to 29.49% in 2018. The margin turned negative and deteriorated sharply in 2019, dropping to -67.44%, indicating significant value loss compared to revenues. In 2020, the negative margin improved to -38.55%, but remained indicative of value destruction. A strong recovery occurred in 2021, with the MVA margin surging to 105.92%, suggesting enhanced efficiency in translating revenues into market value added.