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
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 »
The Market Value Added (MVA) exhibited significant volatility between 2019 and 2023, characterized by a period of substantial growth followed by a sharp contraction. The overall trend shows that market confidence relative to invested capital peaked in 2021 before entering a downward trajectory.
- Market Value Trends
- The market fair value demonstrated an upward trend from 2019 to 2021, rising from US$ 47,264 million to a peak of US$ 59,781 million. This was followed by a significant correction in 2022, where the value dropped to US$ 39,992 million, before recovering slightly to US$ 45,564 million by the end of 2023.
- Invested Capital Dynamics
- Invested capital remained relatively stable from 2019 through 2021, with a slight decrease observed by 2022, reaching a low of US$ 23,044 million. However, 2023 marked a substantial increase in invested capital, rising to US$ 36,379 million, representing the highest capital investment level within the analyzed five-year period.
- Market Value Added (MVA) Analysis
- MVA grew consistently from 2019 to 2021, increasing from US$ 18,321 million to a maximum of US$ 32,215 million, indicating that the market valued the company significantly above its invested capital. A sharp reversal occurred in 2022, with MVA falling to US$ 16,948 million. The decline accelerated in 2023, with MVA dropping to US$ 9,185 million. This final decrease was driven by the simultaneous combination of a lower market value compared to 2021 levels and a significant increase in the capital base.
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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 | 9,185) | 16,948) | 32,215) | 24,975) | 18,321) | |
| Invested capital2 | 36,379) | 23,044) | 27,566) | 29,461) | 28,943) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 25.25% | 73.55% | 116.86% | 84.77% | 63.30% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Freeport-McMoRan Inc. | 116.58% | 122.69% | 138.11% | — | — | |
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 × 9,185 ÷ 36,379 = 25.25%
4 Click competitor name to see calculations.
The financial performance from 2019 to 2023 exhibits a cyclical pattern of value creation, characterized by a significant growth phase peaking in 2021, followed by a sharp contraction in both absolute market value added and the efficiency of capital utilization.
- Market Value Added (MVA)
- A consistent upward trajectory was observed from 2019 to 2021, with MVA increasing from 18,321 million US$ to a peak of 32,215 million US$. However, this trend reversed sharply after 2021, resulting in a substantial decline to 16,948 million US$ in 2022 and further decreasing to 9,185 million US$ by the end of 2023. This represents a significant erosion of market value created over the final two years of the period.
- Invested Capital
- Invested capital remained relatively stable between 2019 and 2022, fluctuating within a range of approximately 23,044 million US$ to 29,461 million US$. A notable shift occurred in 2023, where invested capital surged to 36,379 million US$, marking the highest capital commitment in the analyzed five-year period.
- MVA Spread Ratio
- The MVA spread ratio mirrors the volatility of the MVA, rising from 63.30% in 2019 to a high of 116.86% in 2021, indicating a period of peak value creation relative to the capital base. This ratio subsequently entered a steep decline, falling to 73.55% in 2022 and reaching a low of 25.25% in 2023. The compression of this ratio in 2023 is particularly acute, driven by the simultaneous decrease in MVA and a sharp increase in invested capital.
The data indicates a decoupling of invested capital and market value added in 2023. While the capital base expanded significantly, the market's valuation of the value added by that capital diminished, resulting in the lowest MVA spread ratio of the entire period.
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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 | 9,185) | 16,948) | 32,215) | 24,975) | 18,321) | |
| Sales | 11,812) | 11,915) | 12,222) | 11,497) | 9,740) | |
| Performance Ratio | ||||||
| MVA margin2 | 77.76% | 142.24% | 263.58% | 217.23% | 188.10% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Freeport-McMoRan Inc. | 178.51% | 195.06% | 210.68% | — | — | |
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 × 9,185 ÷ 11,812 = 77.76%
3 Click competitor name to see calculations.
The financial trajectory from 2019 to 2023 is characterized by a period of significant market value expansion followed by a sharp contraction. While revenue levels remained relatively stable, the market's valuation of the company relative to its capital and sales experienced substantial volatility, peaking in 2021 before declining through 2023.
- Market Value Added (MVA) Trends
- A strong upward trend was observed between 2019 and 2021, with MVA increasing from US$ 18,321 million to a peak of US$ 32,215 million. This growth reversed abruptly in 2022, as the value fell to US$ 16,948 million, and continued to decline to US$ 9,185 million by December 31, 2023. This represents a significant reduction in the total market value added over the final two years of the analyzed period.
- Sales Performance
- Sales figures demonstrated moderate growth and subsequent stability. Revenue increased from US$ 9,740 million in 2019 to a high of US$ 12,222 million in 2021. From 2022 to 2023, sales remained steady, experiencing only slight declines to US$ 11,915 million and US$ 11,812 million, respectively. The lack of significant volatility in sales suggests that the fluctuations in MVA were not driven by primary revenue loss.
- MVA Margin Analysis
- The MVA margin mirrored the movement of the absolute MVA, rising from 188.10% in 2019 to a peak of 263.58% in 2021. A sharp contraction occurred thereafter, with the margin dropping to 142.24% in 2022 and further receding to 77.76% by the end of 2023. This decline indicates a substantial reduction in the market premium attributed to the company's sales performance.
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