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
Motorola Solutions Inc., 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 »
A consistent upward trajectory in market valuation and shareholder value creation is evident from 2019 through 2023. The growth in market value has significantly outpaced the growth in invested capital, leading to a substantial expansion of the market value added (MVA) over the five-year period.
- Market Value Trends
- The market value exhibited a slight contraction between 2019 and 2020, decreasing from 37,592 million to 36,951 million. However, from 2021 onward, a period of accelerated growth occurred, with the valuation reaching 60,757 million by December 31, 2023. This represents an overall increase of approximately 61.6% since 2019.
- Invested Capital Analysis
- Invested capital demonstrated a steady and moderate increase throughout the analyzed timeframe. Starting at 6,887 million in 2019, the capital base grew incrementally each year to reach 8,921 million by the end of 2023. The stability of this growth suggests a controlled approach to capital expenditure and investment relative to the company's market expansion.
- Market Value Added (MVA) Performance
- The MVA, which represents the difference between the market value and the invested capital, grew from 30,705 million in 2019 to 51,836 million in 2023. This increase indicates that the market's perception of the company's future earning potential and strategic value has improved significantly. The MVA increased by 68.8% over the period, signaling that the company is generating value far in excess of the capital contributed by investors.
The widening gap between market value and invested capital suggests a high degree of market confidence. The acceleration of MVA growth from 2021 through 2023 indicates that the company has successfully enhanced its competitive positioning or operational efficiency, resulting in a premium valuation that far exceeds its tangible capital investments.
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
Motorola Solutions Inc., 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 | 51,836) | 42,818) | 35,971) | 29,975) | 30,705) | |
| Invested capital2 | 8,921) | 8,350) | 7,857) | 6,976) | 6,887) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 581.06% | 512.79% | 457.82% | 429.69% | 445.85% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Apple Inc. | 4,423.16% | 5,157.62% | 5,626.48% | — | — | |
| Arista Networks Inc. | 1,575.63% | 1,226.33% | 1,872.91% | — | — | |
| Cisco Systems Inc. | 279.75% | 214.20% | 329.31% | — | — | |
| Dell Technologies Inc. | 2.11% | 31.48% | 53.40% | — | — | |
| Lumentum Holdings Inc. | 73.48% | 196.72% | 256.49% | — | — | |
| Super Micro Computer Inc. | 466.63% | 91.12% | 50.17% | — | — | |
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 × 51,836 ÷ 8,921 = 581.06%
4 Click competitor name to see calculations.
Between 2019 and 2023, a strong upward trajectory is observed in the capacity to create market value relative to the capital employed. Following a brief period of contraction in 2020, there is evidence of accelerated growth in both absolute market value added and the efficiency of value creation as reflected in the spread ratio.
- Market Value Added (MVA)
- MVA increased from US$ 30,705 million in 2019 to US$ 51,836 million by the end of 2023. After a marginal decline to US$ 29,975 million in 2020, the metric experienced consistent year-over-year growth, with the most significant gains occurring between 2021 and 2023. This trend indicates a substantial increase in the market premium assigned to the organization over its tangible invested capital.
- Invested Capital
- Invested capital exhibited a steady and controlled increase throughout the period, rising from US$ 6,887 million in 2019 to US$ 8,921 million in 2023. The gradual nature of this growth suggests a disciplined approach to capital expansion while scaling operations.
- MVA Spread Ratio
- The MVA spread ratio demonstrates a significant expansion, rising from 445.85% in 2019 to 581.06% in 2023. Although a dip to 429.69% was recorded in 2020, the ratio rebounded strongly, showing a steep climb in the final three years of the analysis. The widening spread confirms that market valuation is growing at a rate that far outpaces the increase in invested capital, signifying enhanced value creation and increasing investor confidence in the company's long-term growth prospects.
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
Motorola Solutions Inc., 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 | 51,836) | 42,818) | 35,971) | 29,975) | 30,705) | |
| Net sales | 9,978) | 9,112) | 8,171) | 7,414) | 7,887) | |
| Performance Ratio | ||||||
| MVA margin2 | 519.51% | 469.91% | 440.23% | 404.30% | 389.32% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Apple Inc. | 695.76% | 609.53% | 653.71% | — | — | |
| Arista Networks Inc. | 1,189.41% | 844.93% | 1,097.06% | — | — | |
| Cisco Systems Inc. | 278.31% | 240.26% | 367.17% | — | — | |
| Dell Technologies Inc. | 1.17% | 16.47% | 45.88% | — | — | |
| Lumentum Holdings Inc. | 120.58% | 287.34% | 289.28% | — | — | |
| Super Micro Computer Inc. | 158.10% | 38.75% | 18.09% | — | — | |
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 ÷ Net sales
= 100 × 51,836 ÷ 9,978 = 519.51%
3 Click competitor name to see calculations.
Analysis of the five-year period from 2019 to 2023 reveals a sustained increase in market valuation relative to operational scale. Despite a brief contraction in 2020, both total market value added and revenue have experienced significant growth, with market valuation outpacing revenue growth over the long term.
- Market Value Added (MVA)
- The MVA exhibited a strong growth trajectory, rising from US$ 30,705 million in 2019 to US$ 51,836 million by 2023. Following a minor decline to US$ 29,975 million in 2020, the value accelerated annually, reflecting a substantial increase in the market's perception of value creation beyond the capital invested.
- Net Sales Performance
- Revenue trends mirrored the MVA pattern, characterized by a dip in 2020 to US$ 7,414 million followed by a period of consistent expansion. By the end of 2023, net sales reached US$ 9,978 million, representing a steady recovery and an overall increase in top-line performance since 2019.
- MVA Margin Expansion
- The MVA margin demonstrated a continuous and uninterrupted upward trend, increasing from 389.32% in 2019 to 519.51% in 2023. This consistent rise indicates that market valuation grew at a significantly faster rate than net sales, suggesting enhanced investor confidence and a higher premium attributed to each dollar of revenue generated.
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?