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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- Cash Flow Statement
- Common-Size Income Statement
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Capital Asset Pricing Model (CAPM)
- Operating Profit Margin since 2012
- Analysis of Revenues
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MVA
ServiceNow Inc., 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 »
- Market (fair) value of ServiceNow
- The market value experienced a decline from 115,716 million US dollars at the end of 2020 to 89,358 million US dollars by the end of 2022. This indicates a contraction in market valuation over the two-year period. However, from 2022 onwards, the market value demonstrated a substantial recovery and growth, reaching 153,023 million US dollars in 2023 and further increasing to 203,094 million US dollars by the end of 2024.
- Invested capital
- The invested capital consistently increased each year from 4,325 million US dollars in 2020 to 9,898 million US dollars in 2024. This steady growth reflects ongoing investment and capital deployment within the company, nearly doubling the invested capital over the five-year period.
- Market value added (MVA)
- Market value added, which measures the difference between the market (fair) value and invested capital, followed a pattern similar to the market value. It decreased from 111,391 million US dollars in 2020 to 82,868 million US dollars in 2022, showing a reduction in value creation relative to investment. Subsequently, MVA recovered strongly to 144,892 million US dollars in 2023 and increased further to 193,196 million US dollars by 2024. This indicates a significant enhancement in value addition and market confidence in the latter years.
- Overall Trends
- The data reveals a period of decline in market valuation and value creation through 2022, matched with a gradual increase in invested capital. Post-2022, both the market value and MVA show a robust upward trend, suggesting improved market conditions, operational performance, or investor sentiment. The consistent rise in invested capital throughout the period suggests ongoing financial commitment to growth and development initiatives.
MVA Spread Ratio
ServiceNow Inc., 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 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
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.
The financial data reveals several notable trends over the five-year period from 2020 to 2024. The Market Value Added (MVA) exhibits a fluctuating but overall positive trajectory, with an initial decrease followed by a robust recovery and growth in the later years. Invested Capital consistently increased year over year, indicating continued investment or asset accumulation. The MVA Spread Ratio, reflecting the efficiency and effectiveness of invested capital in generating market value above cost, experienced significant oscillations but maintained generally strong values.
- Market Value Added (MVA)
- The MVA started at a high level in 2020, decreased in both 2021 and 2022, reaching its lowest point in 2022 at approximately 82.9 billion USD. Subsequently, there was a strong rebound in 2023 to around 144.9 billion USD, followed by further growth in 2024 to approximately 193.2 billion USD. This suggests that the company's market perception and value creation improved significantly after 2022, potentially implying enhanced profitability, investor confidence, or strategic initiatives paying off.
- Invested Capital
- This metric showed steady and consistent growth across the entire period. Starting at around 4.3 billion USD in 2020, it increased each year, reaching close to 9.9 billion USD by 2024. The ongoing rise in invested capital suggests sustained reinvestment in business operations, expansion, or capital projects, which may be prerequisites for future growth and value creation.
- MVA Spread Ratio
- The MVA Spread Ratio, which indicates the market's valuation premium relative to invested capital, began at an exceptionally high level of about 2575.6% in 2020. It then declined steeply over the next two years, dropping to approximately 1276.9% in 2022. After 2022, the ratio rebounded to nearly 1782.0% in 2023 and further increased to about 1951.9% in 2024. This pattern mirrors the MVA trend and suggests that while the perceived return on invested capital weakened initially, it regained strength and surpassed earlier levels in the final periods reported.
In summary, over the analyzed period the company demonstrated a strategic increase in invested capital, paired with an initially volatile but overall upward trend in market value added and associated performance ratios. The sharp decline in value-added metrics until 2022 indicates a period of challenges or investment payback, followed by a strong recovery and growth phase, highlighting effective management and improved market confidence in recent years.
MVA Margin
ServiceNow Inc., 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 | ||||||
| Revenues | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenues | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
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 ÷ Adjusted revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added experienced a fluctuation over the observed periods. It started at 111,391 million USD in 2020, declined to 82,868 million USD by the end of 2022, indicating a downward trend for two consecutive years. However, from 2023 onward, the MVA rose sharply, reaching 193,196 million USD in 2024. This recovery suggests an enhanced market perception and potentially increased investor confidence toward the end of the period.
- Adjusted Revenues
- Adjusted revenues demonstrated a consistent upward trajectory throughout the years. Beginning at 5,302 million USD in 2020, revenues rose steadily each year to reach 12,032 million USD in 2024. This continuous revenue growth indicates successful operational expansion or increasing demand for the company’s services over the analyzed timeframe.
- MVA Margin
- The MVA margin, representing market value added as a percentage of adjusted revenues, initially decreased significantly from 2,101.08% in 2020 to 1,026.11% by 2022. This reduction aligned with the falling MVA values in early years and suggests a relative decline in market valuation efficiency compared to revenues. From 2023, the margin improved, climbing to 1,605.68% by 2024, reflecting a strengthening in the company's ability to generate market value relative to revenue, consistent with the recovery in MVA.
- Overall Trends
- The data indicates a period of initial market value contraction through 2022 despite robust revenue growth, followed by a strong rebound in both market value metrics and market valuation efficiency afterward. This pattern may reflect external market factors affecting valuation or internal improvements enhancing market confidence after 2022. Continuous revenue growth throughout the period suggests sustained operational performance and potential for long-term value creation.