Microsoft Excel LibreOffice Calc

Oracle Corp. (ORCL)

Market Value Added (MVA)

Difficulty: Advanced

Market value added (MVA) is the difference between a firms’s 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

Oracle Corp., MVA calculation

USD $ in millions

Microsoft Excel LibreOffice Calc
May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014
Fair value of borrowings1 58,513  61,613  60,413  46,950  44,100  26,400 
PV of operating lease payments2 2,158  1,462  1,541  1,125  1,116  1,243 
Market value of common equity 187,206  175,569  209,937  164,950  178,039  178,864 
Preferred stock, $0.01 par value; outstanding: none —  —  —  —  —  — 
Noncontrolling interests 578  498  386  501  435  569 
Less: Marketable securities 17,313  45,641  44,294  35,973  32,652  21,050 
Market (fair) value of Oracle 231,142  193,501  227,983  177,554  191,039  186,026 
Less: Invested capital3 72,089  72,343  78,705  65,186  67,473  58,737 
MVA 159,053  121,158  149,278  112,367  123,565  127,289 

Based on: 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-22), 10-K (filing date: 2015-06-25), 10-K (filing date: 2014-06-26).

1 Fair value of debt. See Details »

2 Present value of operating lease payments. See Details »

3 Invested capital. See Details »

Item Description The company
MVA Oracle Corp.’s market (fair) value less invested capital. Oracle Corp.’s MVA declined from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.

MVA Spread

Oracle Corp., MVA spread calculation

Microsoft Excel LibreOffice Calc
May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014
Selected Financial Data (USD $ in millions)
Market value added (MVA)1 159,053  121,158  149,278  112,367  123,565  127,289 
Invested capital2 72,089  72,343  78,705  65,186  67,473  58,737 
Ratio
MVA spread3 220.64% 167.48% 189.67% 172.38% 183.13% 216.71%

Based on: 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-22), 10-K (filing date: 2015-06-25), 10-K (filing date: 2014-06-26).

2019 Calculations

1 MVA. See Details »

2 Invested capital. See Details »

3 MVA spread = 100 × MVA ÷ Invested capital
= 100 × 159,053 ÷ 72,089 = 220.64%

Ratio Description The company
MVA spread The ratio of MVA to invested capital. It measures the efficiency with which investors’ capital investment has translated into a franchise value and into an aggregate net present value premium. Oracle Corp.’s MVA spread deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

MVA Margin

Oracle Corp., MVA margin calculation

Microsoft Excel LibreOffice Calc
May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014
Selected Financial Data (USD $ in millions)
Market value added (MVA)1 159,053  121,158  149,278  112,367  123,565  127,289 
Revenues 39,506  39,831  37,728  37,047  38,226  38,275 
Add: Increase (decrease) in deferred revenues 77  219  644  553  (35) 243 
Adjusted revenues 39,583  40,050  38,372  37,600  38,191  38,518 
Ratio
MVA margin2 401.82% 302.52% 389.03% 298.85% 323.55% 330.47%

Based on: 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-22), 10-K (filing date: 2015-06-25), 10-K (filing date: 2014-06-26).

2019 Calculations

1 MVA. See Details »

2 MVA margin = 100 × MVA ÷ Adjusted revenues
= 100 × 159,053 ÷ 39,583 = 401.82%

Ratio Description The company
MVA margin The ratio of MVA to sales. It measures how efficiently and prodigiously sales translate into franchise value. Oracle Corp.’s MVA margin deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.