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
Occidental Petroleum Corp., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 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).
1 Fair value of debt. See details »
2 Invested capital. See details »
The Market Value Added (MVA) trajectory between 2020 and 2024 exhibits a distinct arc, characterized by a period of rapid expansion followed by a contraction in value creation relative to the invested capital base.
- Market Valuation Trends
- The market value experienced a consistent growth phase from 2020 to 2022, increasing from 69,465 million USD to a peak of 81,360 million USD. Following this peak, the valuation entered a period of relative stabilization, ending 2024 at 79,432 million USD, suggesting a consolidation of market sentiment after the initial upward surge.
- Invested Capital Dynamics
- A divergent trend is observed in invested capital, which decreased from 63,270 million USD in 2020 to a minimum of 56,295 million USD in 2022. This contraction of the capital base occurred simultaneously with the rise in market value. However, a significant reversal occurred in 2024, as invested capital rose sharply to 66,896 million USD, indicating a substantial increase in the entity's capital deployment or liabilities.
- MVA Analysis and Drivers
- Market Value Added grew aggressively from 6,195 million USD in 2020 to a peak of 25,065 million USD in 2022. This expansion was fueled by the synergistic effect of increasing market capitalization and a decreasing capital base. The subsequent decline in MVA to 12,536 million USD by 2024 is primarily driven by the sharp increase in invested capital during the final year, which outpaced the marginal growth in market value. This pattern indicates that while the entity expanded its asset or capital base significantly in 2024, the market has not yet attributed a proportional increase in fair value to these new investments.
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MVA Spread Ratio
Occidental Petroleum Corp., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 12,536) | 21,194) | 25,065) | 19,928) | 6,195) | |
| Invested capital2 | 66,896) | 56,860) | 56,295) | 58,059) | 63,270) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 18.74% | 37.27% | 44.52% | 34.32% | 9.79% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Chevron Corp. | 46.44% | 47.11% | 57.71% | 54.49% | — | |
| ConocoPhillips | 38.56% | 83.41% | 93.55% | 86.17% | — | |
| Exxon Mobil Corp. | 39.78% | 51.74% | 67.23% | 42.25% | — | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 MVA. See details »
2 Invested capital. See details »
3 2024 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 12,536 ÷ 66,896 = 18.74%
4 Click competitor name to see calculations.
The financial data reveals a period of significant volatility in market value creation and capital utilization between 2020 and 2024. A strong upward trajectory in market value was observed in the early part of the period, followed by a notable contraction and a shift in the capital base toward the end of the analyzed timeframe.
- Market Value Added (MVA)
- A substantial increase in MVA occurred between 2020 and 2022, rising from 6,195 million to a peak of 25,065 million. This indicates a period of aggressive market value growth. However, this trend reversed after 2022, with MVA declining to 21,194 million in 2023 and further dropping to 12,536 million by the end of 2024, representing a significant reduction from the peak value.
- Invested Capital
- Invested capital exhibited a declining trend from 2020 to 2022, moving from 63,270 million to 56,295 million. This downward trend remained relatively stable through 2023 before a sharp increase was recorded in 2024, where invested capital reached 66,896 million, the highest level observed in the five-year period.
- MVA Spread Ratio
- The MVA spread ratio mirrored the trends seen in market value, expanding rapidly from 9.79% in 2020 to a peak of 44.52% in 2022. This peak suggests that the company achieved its highest level of value creation relative to its invested capital during this year. Subsequently, the ratio declined to 37.27% in 2023 and experienced a sharp contraction to 18.74% in 2024. The decline in the spread ratio in 2024 is particularly pronounced, driven by the simultaneous decrease in MVA and the significant increase in invested capital.
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MVA Margin
Occidental Petroleum Corp., MVA margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 12,536) | 21,194) | 25,065) | 19,928) | 6,195) | |
| Net sales | 26,725) | 28,257) | 36,634) | 25,956) | 17,809) | |
| Performance Ratio | ||||||
| MVA margin2 | 46.91% | 75.01% | 68.42% | 76.78% | 34.78% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Chevron Corp. | 50.04% | 50.80% | 51.99% | 67.80% | — | |
| ConocoPhillips | 74.93% | 120.75% | 90.01% | 143.57% | — | |
| Exxon Mobil Corp. | 44.44% | 47.49% | 50.09% | 41.64% | — | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 MVA. See details »
2 2024 Calculation
MVA margin = 100 × MVA ÷ Net sales
= 100 × 12,536 ÷ 26,725 = 46.91%
3 Click competitor name to see calculations.
An analysis of market value added (MVA) and its relationship to net sales between 2020 and 2024 reveals a period of rapid expansion followed by a significant contraction. The growth phase peaked in 2022, after which both absolute value and efficiency margins entered a downward trajectory.
- Market Value Added (MVA) Trends
- A substantial increase in MVA is observed from 2020 to 2022, rising from 6,195 million USD to a peak of 25,065 million USD. This growth was followed by a steady decline, with MVA falling to 21,194 million USD in 2023 and further contracting to 12,536 million USD by the end of 2024, representing a significant reduction from the 2022 high.
- Net Sales Performance
- Net sales mirrored the trajectory of MVA, increasing from 17,809 million USD in 2020 to a peak of 36,634 million USD in 2022. A subsequent decline occurred, with sales dropping to 28,257 million USD in 2023 and ending at 26,725 million USD in 2024. The correlation suggests that market valuation gains were closely aligned with top-line revenue growth during the expansionary period.
- MVA Margin Analysis
- The MVA margin exhibited high volatility, starting at 34.78% in 2020 and surging to 76.78% in 2021. While the absolute MVA peaked in 2022, the margin experienced a slight contraction to 68.42% in that year, before rebounding to 75.01% in 2023. However, by 2024, the margin fell sharply to 46.91%, indicating a diminished capacity to generate market value relative to net sales compared to the preceding three years.
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