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: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Enterprise Value to FCFF (EV/FCFF)
- Return on Equity (ROE) since 2005
- Current Ratio since 2005
- Price to Operating Profit (P/OP) since 2005
- Analysis of Debt
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MVA
Time Warner Inc., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market Value Trend
-
The market (fair) value showed notable fluctuations over the five-year period. It began at 82,168 million US dollars in 2013, rising significantly to 96,140 million in 2014. This was followed by a decline to 79,713 million in 2015, before increasing sharply again to a peak of 102,727 million in 2016. The value slightly decreased to 99,884 million in 2017. Overall, the market value demonstrates volatility with a general upward trend from 2013 to 2017, peaking in 2016.
- Invested Capital Trend
-
Invested capital exhibited relative stability with modest changes during the period. It started at 56,262 million US dollars in 2013, then declined to its lowest point of 52,455 million in 2014. Subsequently, it gradually increased through 2015, 2016, and 2017, reaching 57,150 million by the end of 2017. The invested capital shows a slight recovery after the dip in 2014 but maintains a steady level without pronounced volatility.
- Market Value Added (MVA) Analysis
-
Market value added (MVA), representing the excess of market value over invested capital, exhibited a pattern similar to the market value figures but with amplified fluctuations. Starting at 25,906 million in 2013, MVA increased sharply to 43,686 million in 2014. In 2015, it dropped significantly to 26,550 million, followed by another surge to 47,766 million in 2016. By 2017, MVA decreased slightly to 42,735 million. This trend indicates that the market's valuation premium over the invested capital was subject to substantial variability, reflecting changing investor perceptions and possibly operational or market conditions impacting the company's valuation.
- Overall Insights
-
The period under review is characterized by volatility in market valuation, contrasted with relatively stable invested capital. The peaks in market value and MVA in 2014 and 2016 suggest that the company experienced periods of heightened investor confidence or favorable market conditions. The declines in 2015 may indicate external challenges or internal issues affecting valuation. Despite fluctuations, the MVA remains positive throughout, indicating that the company consistently maintains market value above invested capital, which is a favorable sign of value creation for shareholders.
MVA Spread Ratio
Time Warner Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2017 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added exhibited notable fluctuations during the analyzed period. Starting at 25,906 million US dollars in 2013, it showed a significant increase in 2014, reaching 43,686 million. However, in 2015, a sharp decline occurred with MVA dropping to 26,550 million, nearly reverting to the 2013 level. The value rebounded again in 2016 to 47,766 million but then declined to 42,735 million in 2017. This pattern suggests volatility in the company’s market value performance over the five years.
- Invested Capital
- The invested capital displayed a generally increasing trend over the same period, beginning at 56,262 million US dollars in 2013. It decreased slightly to 52,455 million in 2014 but then gradually increased each subsequent year, reaching 57,150 million by the end of 2017. This steady growth following the 2014 dip indicates a gradual expansion or reinvestment in the business assets.
- MVA Spread Ratio
- The MVA spread ratio, expressed as a percentage, followed a pattern consistent with the movements of MVA relative to invested capital. It started at 46.05% in 2013, sharply increased to 83.28% in 2014, then fell to 49.94% in 2015. A significant rise occurred again in 2016, with the ratio peaking at 86.91%, followed by a decrease to 74.78% in 2017. These fluctuations indicate variability in the company’s ability to generate market value over and above the invested capital, reflecting changes in profitability, market perceptions, or both.
- Overall Insights
- The data reveal cyclical dynamics in market value creation as measured by MVA and MVA spread ratio, contrasted with a more steadily increasing invested capital base. The periodic rises and falls in the MVA and its spread ratio suggest sensitivity to external market conditions or internal operational factors that influenced value generation efficiency. Despite these variations, the upward trend in invested capital denotes ongoing investment efforts, potentially positioning the company for future growth.
MVA Margin
Time Warner Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).
1 MVA. See details »
2 2017 Calculation
MVA margin = 100 × MVA ÷ Adjusted revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The MVA demonstrates a fluctuating pattern over the five-year period. It begins at 25,906 million USD in 2013 and rises sharply to 43,686 million USD in 2014. This is followed by a significant decrease in 2015 to 26,550 million USD. Subsequently, it experiences another substantial increase in 2016 to 47,766 million USD before declining again in 2017 to 42,735 million USD. Overall, despite volatility, the MVA shows a general upward trend when comparing the start and end of the period.
- Adjusted Revenues
- Adjusted revenues display moderate variability but an overall positive trend. Starting at 29,738 million USD in 2013, revenues decline to 27,360 million USD in 2014, reaching the lowest point within the period. From 2014 onwards, revenues increase steadily each year, culminating at 31,400 million USD in 2017, which is the highest value across the timeline. This suggests a recovery and growth phase after the initial decline.
- MVA Margin
- The MVA margin, expressed as a percentage, exhibits significant volatility throughout the years. It starts at 87.11% in 2013 and jumps markedly to 159.67% in 2014, almost doubling. In 2015, the margin declines to 94.17%, followed by a new peak in 2016 at 162.47%. In 2017, the margin decreases again to 136.1%. Despite these fluctuations, the margin remains well above the initial 2013 level in the final year, reflecting an overall improvement in the efficiency of market value addition relative to revenues.
- Summary of Trends
- The data reflects a pattern of volatility with alternating periods of growth and decline, especially visible in MVA and MVA margin. While adjusted revenues dipped initially, they recovered and grew steadily through the latter part of the period, indicating improving operational performance. The MVA and its margin suggest market perception and value creation are subject to more pronounced fluctuations, likely influenced by external factors or market conditions beyond revenue performance alone. The overall improvement in adjusted revenues coupled with elevated MVA margins by 2017 points to enhanced value creation efficiency over time.