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
Marathon Petroleum Corp., MVA calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2019-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
Analysis of the financial performance between 2019 and 2023 reveals a significant improvement in shareholder value creation, characterized by a transition from negative to strongly positive Market Value Added (MVA).
- Market Value Trajectory
- The market value exhibited an overall upward trend over the five-year period. After starting at $73,489 million in 2019 and experiencing a temporary contraction to $73,976 million in 2021, the value grew steadily to reach a peak of $89,807 million by December 31, 2023.
- Invested Capital Dynamics
- A general downward trend in invested capital is observed. The capital base decreased from $82,004 million in 2019 to $63,897 million in 2023. This reduction indicates a leaner capital structure or the optimization of the asset base over the analyzed timeframe.
- Market Value Added (MVA) Performance
- The MVA underwent a substantial reversal, moving from a negative position of -$8,515 million in 2019 to a positive $25,910 million by 2023. The transition to positive value creation occurred in 2020 and accelerated consistently through 2023, demonstrating that the market valuation now significantly exceeds the total capital invested in the company.
The widening gap between an increasing market value and a decreasing capital base has exponentially increased the MVA, reflecting heightened market confidence and a perceived increase in the efficiency of capital utilization.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
MVA Spread Ratio
Marathon Petroleum Corp., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 25,910) | 16,344) | 10,397) | 10,464) | (8,515) | |
| Invested capital2 | 63,897) | 69,547) | 63,579) | 70,186) | 82,004) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 40.55% | 23.50% | 16.35% | 14.91% | -10.38% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Chevron Corp. | 47.11% | 57.71% | 54.49% | — | — | |
| ConocoPhillips | 83.41% | 93.55% | 86.17% | — | — | |
| ExxonMobil Holdings Corp. | 51.74% | 67.23% | 42.25% | — | — | |
Based on: 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), 10-K (reporting date: 2019-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2023 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 25,910 ÷ 63,897 = 40.55%
4 Click competitor name to see calculations.
Between December 31, 2019, and December 31, 2023, a substantial upward trajectory in value creation is evident, characterized by a reversal from negative market value added to significant positive gains.
- Market Value Added (MVA)
- A profound recovery is observed starting in 2020. Following a deficit of US$ 8,515 million in 2019, MVA transitioned to a positive US$ 10,464 million in 2020. This growth accelerated in the subsequent years, reaching US$ 25,910 million by the end of 2023, indicating that the market valuation of the entity has grown significantly beyond the total capital invested.
- Invested Capital
- Invested capital exhibited a general downward trend over the analyzed five-year period. From a peak of US$ 82,004 million in 2019, the figure decreased to US$ 63,897 million by December 31, 2023. Although a moderate increase occurred in 2022, the overall reduction in the capital base indicates a contraction in total invested resources over the long term.
- MVA Spread Ratio
- The MVA spread ratio demonstrates a consistent and accelerating positive trend. The ratio moved from -10.38% in 2019 to 40.55% in 2023. This expansion is the result of the simultaneous increase in MVA and the overall decrease in invested capital, signaling an increasingly positive gap between the actual return on invested capital and the market's required rate of return.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
MVA Margin
Marathon Petroleum Corp., MVA margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 25,910) | 16,344) | 10,397) | 10,464) | (8,515) | |
| Sales and other operating revenues | 148,379) | 177,453) | 119,983) | 69,779) | 123,949) | |
| Performance Ratio | ||||||
| MVA margin2 | 17.46% | 9.21% | 8.67% | 15.00% | -6.87% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Chevron Corp. | 50.80% | 51.99% | 67.80% | — | — | |
| ConocoPhillips | 120.75% | 90.01% | 143.57% | — | — | |
| ExxonMobil Holdings Corp. | 47.49% | 50.09% | 41.64% | — | — | |
Based on: 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), 10-K (reporting date: 2019-12-31).
1 MVA. See details »
2 2023 Calculation
MVA margin = 100 × MVA ÷ Sales and other operating revenues
= 100 × 25,910 ÷ 148,379 = 17.46%
3 Click competitor name to see calculations.
An analysis of the five-year period from 2019 to 2023 reveals a substantial recovery and growth trajectory in the creation of shareholder value. The transition from a negative market value added position to a significant positive surplus indicates a strong upward trend in the market's perception of the company's value relative to its invested capital.
- Market Value Added (MVA) Trends
- A significant reversal is observed starting in 2020, where MVA moved from a deficit of US$ 8,515 million in 2019 to a surplus of US$ 10,464 million. This positive momentum continued through 2023, with MVA reaching a peak of US$ 25,910 million. The steady increase from 2021 onwards suggests a consistent expansion in the wealth created for shareholders over the invested capital.
- Revenue Volatility and Correlation
- Operating revenues exhibited considerable volatility, characterized by a sharp decline in 2020 to US$ 69,779 million, followed by a recovery to a peak of US$ 177,453 million in 2022. Despite a moderate decrease in revenue to US$ 148,379 million in 2023, MVA continued to climb, suggesting that market value creation became increasingly decoupled from short-term revenue fluctuations.
- MVA Margin Performance
- The MVA margin demonstrates a pattern of recovery and optimization. After a low of -6.87% in 2019, the margin spiked to 15.00% in 2020. Following a period of stabilization between 8.67% and 9.21% during 2021 and 2022, the margin reached its highest level of 17.46% in 2023. This final increase is particularly noteworthy as it occurred alongside a reduction in total revenues, indicating a higher efficiency in generating market value per dollar of revenue.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?