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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Newmont Corp. pages available for free this week:
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Debt
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MVA
Newmont 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 »
- Market (fair) value of Newmont
- The market value showed a general increasing trend from 2019 to 2021, rising from $47,264 million to $59,781 million. However, in 2022, there was a notable decline to $39,992 million, followed by a partial recovery to $45,564 million in 2023. This pattern indicates initial growth over the first three years, a sharp decrease in 2022, and some level of rebound the following year.
- Invested capital
- The invested capital remained relatively stable between 2019 and 2021, fluctuating slightly but mostly declining from $28,943 million in 2019 to $27,566 million in 2021. A more pronounced drop occurred in 2022, with invested capital decreasing to $23,044 million. However, in 2023, invested capital significantly increased to $36,379 million, marking the highest value in the period under review. This suggests a possible reinvestment or capital allocation change in 2023 after the 2022 decline.
- Market value added (MVA)
- The MVA exhibited a rising trend from 2019 to 2021, increasing steadily from $18,321 million to a peak of $32,215 million in 2021. This positive trajectory reversed sharply in 2022, with the MVA falling to $16,948 million, followed by a continued decline in 2023 to $9,185 million. The reduction in MVA in the last two years reflects a decreasing market value relative to invested capital, indicating a potential erosion of shareholder value during that period.
MVA Spread Ratio
Newmont Corp., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Freeport-McMoRan Inc. | ||||||
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 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added exhibited an upward trend from 2019 to 2021, increasing significantly from US$18,321 million to US$32,215 million. However, this positive trajectory reversed substantially in the subsequent years, with MVA declining to US$16,948 million in 2022 and further dropping to US$9,185 million by the end of 2023.
- Invested Capital
- Invested Capital remained relatively stable from 2019 through 2020, at approximately US$29,000 million. In 2021 and 2022, the figure decreased to US$27,566 million and US$23,044 million respectively, representing a contraction in invested assets. Contrarily, there was a notable increase in 2023, with invested capital rising sharply to US$36,379 million, the highest in the five-year period.
- MVA Spread Ratio
- The MVA spread ratio demonstrated a strong positive performance from 2019 to 2021, climbing from 63.3% to a peak of 116.86% in 2021. This indicates that the market value generated in excess of invested capital was at its highest in 2021. Subsequently, the ratio decreased considerably in 2022 to 73.55%, and plunged further to a low of 25.25% in 2023, suggesting a diminishment in value creation relative to the invested capital during these years.
- Overall Analysis
- The data portrays a scenario of growth in value creation up to 2021, followed by a period of decline in subsequent years. The marked increase in invested capital in 2023, coupled with a sharp fall in both MVA and MVA spread ratio, may imply challenges in generating corresponding market value from additional investments during that year. This trend highlights potential concerns regarding the efficiency of capital utilization and future profitability prospects.
MVA Margin
Newmont Corp., MVA margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Sales | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Freeport-McMoRan Inc. | ||||||
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
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added (MVA) showed a generally increasing trend from 2019 to 2021, rising from 18,321 million US dollars in 2019 to a peak of 32,215 million US dollars in 2021. However, the following years saw a significant decline, with MVA dropping to 16,948 million US dollars in 2022 and further decreasing to 9,185 million US dollars in 2023. This indicates a substantial reduction in the company's market value creation during the last two years of the period.
- Sales
- Sales figures increased steadily from 9,740 million US dollars in 2019 to a high of 12,222 million US dollars in 2021. In 2022 and 2023, sales slightly decreased, stabilizing around 11,915 and 11,812 million US dollars respectively. The sales trend suggests moderate growth up to 2021, followed by a mild contraction but relatively stable sales volumes thereafter.
- MVA Margin
- The MVA margin, representing market value added as a percentage of sales, demonstrated significant variation over the period. It increased from 188.1% in 2019 to a peak of 263.58% in 2021, indicating improved efficiency or value creation relative to sales during this timeframe. Subsequently, it saw a marked decline to 142.24% in 2022 and further to 77.76% in 2023. This reduction suggests that despite relatively stable sales, the company's value creation relative to sales weakened considerably in the later years.
- Overall Analysis
- The data reveals a strong performance in value creation and sales growth through to 2021, followed by a period of significant deterioration in market value metrics through 2022 and 2023. While sales remained fairly stable after a peak in 2021, the company's ability to generate market value in excess of its sales diminished substantially, as evidenced by the declines in both MVA and MVA margin. This pattern may point to changing market conditions or internal factors impacting the firm's market perception and valuation beyond operational sales performance.