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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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
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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 analysis of the financial data from the given periods reveals several notable trends related to the market value, invested capital, and market value added for the company.
- Market (fair) value of Occidental
- This metric showed an overall increase from 69,465 million USD in 2020 to 79,432 million USD by the end of 2024. The market value rose steadily from 2020 through 2022, peaking at 81,360 million USD. However, there was a slight decline in 2023 to 78,054 million USD, followed by a modest recovery in 2024.
- Invested capital
- The invested capital exhibited a different trend. Initially, it decreased from 63,270 million USD in 2020 to 56,295 million USD by the end of 2022. In 2023, the invested capital remained relatively stable around 56,860 million USD but experienced a significant increase in 2024, reaching 66,896 million USD.
- Market value added (MVA)
- The market value added showed considerable fluctuation over the analyzed period. It more than tripled from 6,195 million USD in 2020 to 19,928 million USD in 2021. MVA continued to increase, reaching its highest point at 25,065 million USD in 2022. Following this peak, there was a noticeable decline to 21,194 million USD in 2023, and a sharper drop to 12,536 million USD in 2024.
In summary, while the market (fair) value demonstrated a general upward trajectory with minor interruptions, invested capital initially contracted before rising sharply in the final year. Market value added experienced robust growth in the early years but decreased considerably after 2022. These patterns suggest fluctuations in the company's value creation relative to its invested capital, indicating changing market perceptions or underlying operational dynamics throughout the period.
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 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
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 × ÷ =
4 Click competitor name to see calculations.
- Market value added (MVA)
- The Market Value Added shows a rising trend from 2020 to 2022, increasing significantly from 6,195 million USD to 25,065 million USD. However, after peaking in 2022, it declined in the subsequent years, dropping to 21,194 million USD in 2023 and further down to 12,536 million USD by 2024. This indicates a strong growth up to 2022 followed by a notable reduction in perceived market value contribution in the following years.
- Invested capital
- Invested capital exhibited a decline from 63,270 million USD in 2020 to 56,295 million USD in 2022. After stabilizing somewhat in 2023 at 56,860 million USD, there was a substantial increase to 66,896 million USD in 2024. This pattern implies initial capital reduction or divestment up to 2022, followed by renewed investment or capital expansion in 2024.
- MVA spread ratio
- The MVA spread ratio experienced substantial growth between 2020 and 2022, progressing from 9.79% to a peak of 44.52%. This reflects an increasing return or value creation relative to invested capital during that period. Subsequently, the ratio decreased to 37.27% in 2023 and dropped further to 18.74% in 2024, indicating a diminishing spread between market value added and invested capital in recent years.
- Overall analysis
- From 2020 until 2022, the company experienced strong value creation as evidenced by rising MVA and MVA spread ratio coupled with a decline in invested capital, suggesting efficient capital use and growth in market valuation. Post-2022, a reversal is visible with declining MVA and MVA spread ratio alongside a marked increase in invested capital in 2024. This shift may indicate challenges in maintaining earlier growth momentum and increased capital deployment, potentially impacting profitability or market perception.
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 | ||||||
| Net sales | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
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 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added shows a significant increase from 6,195 million US dollars at the end of 2020 to a peak of 25,065 million US dollars in 2022. Following this peak, there is a noticeable decline, decreasing to 21,194 million US dollars in 2023 and further dropping to 12,536 million US dollars by the end of 2024. This pattern suggests that after a period of substantial value creation, the company experienced challenges or market conditions that reduced its market value added in the later years.
- Net Sales
- Net sales demonstrate a robust upward trend initially, rising from 17,809 million US dollars in 2020 to a high of 36,634 million US dollars in 2022. However, after this peak, net sales decline to 28,257 million US dollars in 2023 and continue a moderate decrease to 26,725 million US dollars in 2024. This indicates that while the company achieved significant sales growth in the early period, sales volume or pricing may have tapered off in the more recent years.
- MVA Margin
- The MVA margin reflects the efficiency of generating market value relative to sales. It starts at 34.78% in 2020 and increases sharply to 76.78% in 2021. It remains relatively high at 68.42% in 2022 and 75.01% in 2023, before declining substantially to 46.91% in 2024. This fluctuation suggests that the company improved its value creation relative to sales initially, maintaining strong performance for several years before experiencing a notable drop in efficiency by 2024.
- Overall Trends and Insights
- The data reflects a period of significant growth and value creation up to 2022, with both market value added and net sales reaching their highest points. The MVA margin also indicates heightened efficiency in converting sales into market value during this period. After 2022, a reversal occurs with declines in market value added, net sales, and MVA margin, suggesting possible operational, market, or external pressures affecting the company’s performance. The reduction in MVA margin in 2024 implies that the company’s ability to generate market value from sales weakened even more relative to previous years.