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
Northrop Grumman Corp., MVA calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2018-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of Northrop Grumman Corp.
- The market value demonstrated fluctuations over the five-year period. It increased notably from approximately $62.5 billion in 2018 to around $80.8 billion in 2019, reflecting substantial growth. However, in 2020, the value declined to about $68.3 billion, indicating a contraction. Subsequently, the market value rebounded, rising to nearly $74.9 billion in 2021 and further to approximately $81.8 billion in 2022, reaching the highest point in the observed timeframe.
- Invested Capital
- Invested capital showed a consistent upward trend across the years. Beginning at about $24.1 billion in 2018, it slightly decreased to roughly $23.5 billion in 2019. From 2020 onwards, invested capital increased steadily, reaching $26.6 billion in 2020, $27.6 billion in 2021, and culminating at $30.1 billion in 2022. This pattern indicates ongoing investment and growth in capital resources.
- Market Value Added (MVA)
- MVA exhibited variability during the period analyzed. Starting at approximately $38.4 billion in 2018, it rose sharply to $57.3 billion in 2019. However, it declined to $41.6 billion in 2020, mirroring the dip in market value seen in the same year. The MVA then increased again to $47.3 billion in 2021 and further to $51.7 billion in 2022, suggesting an improvement in market perception relative to invested capital in the latter years.
MVA Spread Ratio
Northrop Grumman Corp., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 51,655) | 47,305) | 41,621) | 57,299) | 38,384) | |
| Invested capital2 | 30,111) | 27,632) | 26,642) | 23,507) | 24,076) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 171.55% | 171.19% | 156.23% | 243.75% | 159.43% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Boeing Co. | 250.89% | 256.38% | 257.78% | — | — | |
| Caterpillar Inc. | 194.33% | 165.08% | 177.78% | — | — | |
| Eaton Corp. plc | 149.39% | 132.30% | 124.83% | — | — | |
| GE Aerospace | 84.87% | 110.77% | 64.66% | — | — | |
| Honeywell International Inc. | 224.23% | 209.78% | 236.48% | — | — | |
| Lockheed Martin Corp. | 399.68% | 319.28% | 284.59% | — | — | |
| RTX Corp. | 54.30% | 57.80% | 31.41% | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2022 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 51,655 ÷ 30,111 = 171.55%
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added shows significant fluctuations over the analyzed period. Starting at 38,384 million USD in 2018, it increased sharply to 57,299 million USD in 2019. This was followed by a notable decline to 41,621 million USD in 2020. Subsequently, it rose again to 47,305 million USD in 2021 and further increased to 51,655 million USD in 2022. While there was a strong peak in 2019, the overall trend from 2018 to 2022 indicates growth, albeit with considerable volatility.
- Invested Capital
- Invested Capital demonstrates a gradual and steady increase throughout the period. It started at 24,076 million USD in 2018, slightly decreased to 23,507 million USD in 2019, then resumed growth reaching 26,642 million USD in 2020. This upward trajectory continued in 2021 with 27,632 million USD and further increased to 30,111 million USD in 2022. The data indicates ongoing investment expansion, suggesting a focus on asset or operational base growth.
- MVA Spread Ratio
- The MVA Spread Ratio, expressed as a percentage, experienced considerable variation over the five years. It was 159.43% in 2018 and rose sharply to a peak of 243.75% in 2019. However, it declined significantly to 156.23% in 2020, before steadily increasing again to 171.19% in 2021 and slightly to 171.55% in 2022. This ratio’s trend closely mirrors the volatility seen in Market Value Added, indicating fluctuations in the firm’s ability to generate value above its invested capital.
MVA Margin
Northrop Grumman Corp., MVA margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 51,655) | 47,305) | 41,621) | 57,299) | 38,384) | |
| Sales | 36,602) | 35,667) | 36,799) | 33,841) | 30,095) | |
| Performance Ratio | ||||||
| MVA margin2 | 141.13% | 132.63% | 113.10% | 169.32% | 127.54% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Boeing Co. | 191.47% | 203.39% | 211.11% | — | — | |
| Caterpillar Inc. | 188.24% | 190.31% | 246.13% | — | — | |
| Eaton Corp. plc | 221.57% | 198.58% | 191.64% | — | — | |
| GE Aerospace | 76.94% | 111.81% | 103.34% | — | — | |
| Honeywell International Inc. | 295.90% | 293.22% | 350.74% | — | — | |
| Lockheed Martin Corp. | 161.14% | 136.30% | 122.08% | — | — | |
| RTX Corp. | 91.75% | 102.95% | 64.17% | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 MVA. See details »
2 2022 Calculation
MVA margin = 100 × MVA ÷ Sales
= 100 × 51,655 ÷ 36,602 = 141.13%
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added experienced significant fluctuations throughout the observed period. Starting at 38,384 million US dollars in 2018, it rose markedly to a peak of 57,299 million in 2019. Subsequently, the MVA declined sharply to 41,621 million in 2020, followed by a recovery phase reaching 47,305 million in 2021 and further increasing to 51,655 million by the end of 2022. This pattern indicates a high degree of volatility with a general upward trend after the 2020 trough.
- Sales
- Sales demonstrated a steady upwards trajectory over the same timeframe, increasing from 30,095 million US dollars in 2018 to 36,799 million in 2020. There was a slight dip in 2021 to 35,667 million, but sales resumed growth in 2022, reaching 36,602 million. Overall, the sales figures reflect moderate growth with a minor setback in 2021.
- MVA Margin
- The MVA margin, expressed as a percentage, closely mirrors the behavior of Market Value Added relative to sales. It increased substantially from 127.54% in 2018 to a high of 169.32% in 2019, then fell to 113.1% in 2020 before recovering to 132.63% in 2021 and further to 141.13% in 2022. This indicates that the value generated over sales was strongest in 2019, dipped significantly in 2020, and improved steadily thereafter. The fluctuation suggests variability in efficiency or market perceptions of value creation across the years.