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
Parker-Hannifin Corp., MVA calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
1 Fair value of debt. See details »
2 Invested capital. See details »
The financial trajectory from June 30, 2017, to June 30, 2022, demonstrates a significant expansion in market valuation and a corresponding shift in the creation of shareholder value. While market capitalization grew steadily over the six-year period, the efficiency of value creation as measured by Market Value Added (MVA) experienced a period of rapid acceleration followed by a moderate contraction in the final year.
- Market Value Trends
- A consistent upward trend in market valuation is observed, rising from 27.3 billion USD in 2017 to 47.9 billion USD by 2022. The most aggressive growth occurred between 2019 and 2021, where the market value increased from 27.9 billion USD to 46.8 billion USD, suggesting a strong increase in investor confidence or expanded market expectations during this interval.
- Invested Capital Dynamics
- Invested capital remained relatively stable between 2017 and 2018 before entering a general growth phase. A notable spike occurred in 2022, where invested capital rose sharply to 22.0 billion USD from 16.9 billion USD in the previous year. This indicates a significant deployment of capital, likely associated with strategic acquisitions, infrastructure investments, or increased operational scaling.
- Market Value Added (MVA) Analysis
- MVA exhibited a non-linear progression, peaking in 2021 at 29.9 billion USD. The substantial increase in MVA between 2019 and 2021 indicates that the market's valuation of the company grew at a much faster rate than the capital invested in the business. However, in 2022, MVA declined to 25.9 billion USD. This reduction was not driven by a loss in market value—which actually increased—but was instead a direct result of the significant increase in invested capital, which offset the gains in market capitalization.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
MVA Spread Ratio
Parker-Hannifin Corp., MVA spread ratio calculation, comparison to benchmarks
| Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Market value added (MVA)1 | 25,903,927) | 29,894,694) | 18,821,779) | 12,609,004) | 14,948,717) | 13,792,921) | |
| Invested capital2 | 21,994,132) | 16,926,500) | 17,529,292) | 15,269,283) | 13,016,451) | 13,507,821) | |
| Performance Ratio | |||||||
| MVA spread ratio3 | 117.78% | 176.61% | 107.37% | 82.58% | 114.84% | 102.11% | |
| Benchmarks | |||||||
| MVA Spread Ratio, Competitors4 | |||||||
| Boeing Co. | 250.73% | 256.11% | — | — | — | — | |
| Caterpillar Inc. | 194.33% | 165.08% | — | — | — | — | |
| Eaton Corp. plc | 149.39% | 132.30% | — | — | — | — | |
| GE Aerospace | 84.87% | 110.77% | — | — | — | — | |
| Honeywell International Inc. | 224.23% | 209.78% | — | — | — | — | |
| Lockheed Martin Corp. | 399.68% | 319.28% | — | — | — | — | |
| RTX Corp. | 59.03% | 61.85% | — | — | — | — | |
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
1 MVA. See details »
2 Invested capital. See details »
3 2022 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 25,903,927 ÷ 21,994,132 = 117.78%
4 Click competitor name to see calculations.
The financial performance from June 30, 2017, to June 30, 2022, reflects an overall expansion in market value creation, characterized by significant volatility in efficiency ratios and a general increase in the capital base.
- Market Value Added (MVA)
- A general upward trajectory is observed in MVA, which grew from 13,792,921 thousand US dollars in 2017 to 25,903,927 thousand US dollars in 2022. The most substantial growth occurred between 2020 and 2021, where MVA peaked at 29,894,694 thousand US dollars, representing a sharp increase in the difference between the market value of the company and the capital contributed by investors.
- Invested Capital
- Invested capital exhibited a steady long-term increase, rising from 13,507,821 thousand US dollars in 2017 to 21,994,132 thousand US dollars by 2022. While a slight contraction occurred in 2018 and 2021, the overall trend indicates a consistent expansion of the company's asset base used to generate value.
- MVA Spread Ratio
- The MVA spread ratio displayed significant fluctuations over the period. A notable decline occurred in 2019, with the ratio dropping to 82.58%, indicating a period where value creation lagged relative to the growth of invested capital. This was followed by a rapid recovery and a peak of 176.61% in 2021, suggesting a period of exceptional market valuation relative to the capital employed. By 2022, the ratio moderated to 117.78%, coinciding with a substantial increase in invested capital and a slight reduction in total MVA.
In summary, the data indicates that while the absolute market value added has increased significantly over the six-year span, the efficiency of this value creation—as measured by the MVA spread ratio—has been inconsistent, reaching a high point of efficiency in 2021 before normalizing in 2022.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
MVA Margin
Parker-Hannifin Corp., MVA margin calculation, comparison to benchmarks
| Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Market value added (MVA)1 | 25,903,927) | 29,894,694) | 18,821,779) | 12,609,004) | 14,948,717) | 13,792,921) | |
| Net sales | 15,861,608) | 14,347,640) | 13,695,520) | 14,320,324) | 14,302,392) | 12,029,312) | |
| Performance Ratio | |||||||
| MVA margin2 | 163.31% | 208.36% | 137.43% | 88.05% | 104.52% | 114.66% | |
| Benchmarks | |||||||
| MVA Margin, Competitors3 | |||||||
| Boeing Co. | 191.47% | 203.39% | — | — | — | — | |
| Caterpillar Inc. | 188.24% | 190.31% | — | — | — | — | |
| Eaton Corp. plc | 221.57% | 198.58% | — | — | — | — | |
| GE Aerospace | 76.94% | 111.81% | — | — | — | — | |
| Honeywell International Inc. | 295.90% | 293.22% | — | — | — | — | |
| Lockheed Martin Corp. | 161.14% | 136.30% | — | — | — | — | |
| RTX Corp. | 96.78% | 107.41% | — | — | — | — | |
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
1 MVA. See details »
2 2022 Calculation
MVA margin = 100 × MVA ÷ Net sales
= 100 × 25,903,927 ÷ 15,861,608 = 163.31%
3 Click competitor name to see calculations.
Analysis of the financial performance between 2017 and 2022 reveals a period of significant volatility and expansion in market valuation relative to operational revenue.
- Market Value Added (MVA) Trends
- The MVA exhibited a fluctuating but generally upward trajectory over the six-year period. After a decline in 2019 to 12.61 billion USD, the value experienced an aggressive surge, peaking at 29.89 billion USD in 2021. A subsequent correction occurred in 2022, with the value receding to 25.90 billion USD.
- Net Sales Performance
- Revenue demonstrated a consistent growth trend, increasing from 12.03 billion USD in 2017 to 15.86 billion USD in 2022. A minor contraction was observed in 2020, where sales decreased to 13.70 billion USD, before returning to a growth phase in 2021 and 2022.
- MVA Margin Analysis
- The MVA margin experienced substantial volatility, reflecting shifts in investor perception relative to sales performance. The margin reached a period low of 88.05% in 2019 before climbing sharply to a peak of 208.36% in 2021. By 2022, the margin settled at 163.31%, indicating that while market value remains elevated relative to sales, the extreme premium observed in 2021 has moderated.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?