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
Royal Caribbean Cruises Ltd., MVA calculation
US$ in thousands
Based on: 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), 10-K (reporting date: 2017-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
The analysis of Market Value Added (MVA) from 2017 to 2021 reveals a period of significant volatility, characterized by a sharp contraction followed by a robust recovery. MVA, which represents the difference between the market valuation of the company and the total capital invested, shifted from 18.04 billion USD in 2017 to a low of 7.54 billion USD in 2019, before rebounding to 15.91 billion USD by the end of 2021.
- Market Valuation Trends
- The fair market value experienced notable fluctuations over the five-year period. After a modest increase in 2018, the valuation declined to 31.71 billion USD in 2019. A significant surge occurred in 2020, with the market value peaking at 44.43 billion USD, followed by a slight correction to 42.24 billion USD in 2021.
- Invested Capital Trajectory
- Invested capital exhibited a consistent upward trend between 2017 and 2020, rising from 18.11 billion USD to 28.44 billion USD. This indicates a steady expansion of the capital base utilized for operations. A marginal decrease was observed in 2021, with invested capital falling to 26.32 billion USD.
- MVA Performance and Correlation
- A critical divergence occurred between 2017 and 2019, where the MVA decreased substantially despite the increase in invested capital. This suggests that during this interval, the market's perception of value creation did not keep pace with the capital being deployed. The recovery observed in 2020 and 2021 was driven primarily by the sharp increase in market value, which effectively decoupled from the trend of capital expansion to restore MVA to approximately 15.9 billion USD.
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MVA Spread Ratio
Royal Caribbean Cruises Ltd., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | 15,914,790) | 15,990,145) | 7,542,459) | 14,754,487) | 18,042,380) | |
| Invested capital2 | 26,323,667) | 28,435,034) | 24,165,583) | 22,762,454) | 18,110,618) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 60.46% | 56.23% | 31.21% | 64.82% | 99.62% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Airbnb Inc. | 1,602.12% | — | — | — | — | |
| Booking Holdings Inc. | 637.88% | — | — | — | — | |
| Chipotle Mexican Grill Inc. | 750.94% | — | — | — | — | |
| DoorDash, Inc. | 975.30% | — | — | — | — | |
| McDonald’s Corp. | 393.79% | — | — | — | — | |
| Starbucks Corp. | 552.49% | 492.67% | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2021 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 15,914,790 ÷ 26,323,667 = 60.46%
4 Click competitor name to see calculations.
The financial trajectory from 2017 to 2021 is characterized by a significant contraction in market value added during the mid-period, followed by a recovery, occurring alongside a general expansion of the invested capital base.
- Market Value Added (MVA)
- A downward trend is observed from 2017 through 2019, where MVA decreased from 18,042,380 thousand USD to a minimum of 7,542,459 thousand USD. This contraction was reversed in 2020, with a sharp increase to 15,990,145 thousand USD, remaining relatively stable through 2021 at 15,914,790 thousand USD.
- Invested Capital
- Invested capital demonstrated a consistent growth pattern for the majority of the period, rising from 18,110,618 thousand USD in 2017 to a peak of 28,435,034 thousand USD in 2020. A slight reduction occurred by the end of 2021, bringing the total to 26,323,667 thousand USD.
- MVA Spread Ratio
- The MVA spread ratio reflects a significant decline in value creation efficiency, falling from 99.62% in 2017 to a low of 31.21% in 2019. This metric recovered in 2020 to 56.23% and continued to improve to 60.46% in 2021, indicating a restoration of market valuation relative to the capital invested.
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MVA Margin
Royal Caribbean Cruises Ltd., MVA margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | 15,914,790) | 15,990,145) | 7,542,459) | 14,754,487) | 18,042,380) | |
| Revenues | 1,532,133) | 2,208,805) | 10,950,661) | 9,493,849) | 8,777,845) | |
| Performance Ratio | ||||||
| MVA margin2 | 1,038.73% | 723.93% | 68.88% | 155.41% | 205.54% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Airbnb Inc. | 1,448.64% | — | — | — | — | |
| Booking Holdings Inc. | 873.40% | — | — | — | — | |
| Chipotle Mexican Grill Inc. | 544.85% | — | — | — | — | |
| DoorDash, Inc. | 634.30% | — | — | — | — | |
| McDonald’s Corp. | 808.92% | — | — | — | — | |
| Starbucks Corp. | 450.20% | 480.36% | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 MVA. See details »
2 2021 Calculation
MVA margin = 100 × MVA ÷ Revenues
= 100 × 15,914,790 ÷ 1,532,133 = 1,038.73%
3 Click competitor name to see calculations.
The financial data indicates a period of significant volatility in market valuation and operational performance between 2017 and 2021, characterized by a sharp divergence between revenue generation and market value added during the latter years of the period.
- Market Value Added (MVA) Trends
- The MVA experienced a notable decline from 2017 to 2019, dropping from approximately 18.04 billion US$ to a low of 7.54 billion US$. However, a strong recovery occurred in 2020, with the MVA rising to 15.99 billion US$ and remaining relatively stable at 15.91 billion US$ by the end of 2021.
- Revenue Trajectory
- Revenues exhibited a consistent growth trend from 2017 through 2019, peaking at 10.95 billion US$. This growth was followed by a severe contraction in 2020, where revenues fell to 2.21 billion US$, and a further decline to 1.53 billion US$ in 2021.
- MVA Margin Analysis
- The MVA margin demonstrates an inverse correlation with revenue levels. From 2017 to 2019, as revenues increased, the MVA margin compressed from 205.54% to 68.88%. Conversely, during the period of drastic revenue decline in 2020 and 2021, the MVA margin surged exponentially, reaching 723.93% and 1,038.73%, respectively. This spike is attributable to the significant reduction in the revenue denominator relative to the recovered market valuation.
In summary, the period is marked by a decoupling of market value and operational revenue. While the company's ability to generate revenue collapsed after 2019, the market's perceived value of the firm recovered and stabilized, leading to an artificial inflation of the MVA margin.
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