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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- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2013
- Debt to Equity since 2013
- Total Asset Turnover since 2013
- Analysis of Revenues
- Aggregate Accruals
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MVA
Twitter Inc., 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 »
- Market (fair) value of Twitter
- The market (fair) value experienced a decline from 24.26 billion in 2017 to 22.93 billion in 2018, followed by an increase to 29.03 billion in 2019. A significant surge occurred in 2020, reaching 57.37 billion, before decreasing sharply to 30.58 billion in 2021.
- Invested capital
- Invested capital showed a consistent upward trend over the entire period. Starting at 4.63 billion in 2017, it increased steadily each year, reaching 7.45 billion in 2021. This reflects ongoing capital investment or growth in the company’s asset base.
- Market value added (MVA)
- Market value added, defined as the difference between market value and invested capital, generally followed a similar pattern to market value. The MVA declined from 19.63 billion in 2017 to 17.74 billion in 2018, then increased to 23.74 billion in 2019. The highest MVA was recorded in 2020 at 51.40 billion, largely reflecting the spike in market value that year. However, MVA fell sharply to 23.13 billion in 2021, indicating a reduced premium over the invested capital compared to the previous year.
- Overall insights
- The financial data reveals a volatile market valuation for the company over the five-year period, with a pronounced peak in 2020. Despite this volatility in market value, invested capital increased steadily without interruption. The divergence between these measures resulted in fluctuations in market value added, signaling varying levels of market confidence or perceived value creation relative to invested capital. The sharp increase and subsequent decrease in market value and MVA around 2020 reflect a period of significant reevaluation by the market.
MVA Spread Ratio
Twitter Inc., 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 | ||||||
| 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: 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 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added exhibits an overall fluctuating trend over the observed periods. It decreased from approximately 19.63 billion in 2017 to around 17.74 billion in 2018, then increased significantly to roughly 23.74 billion in 2019. The peak is observed in 2020 with approximately 51.40 billion, followed by a notable decline to about 23.13 billion in 2021. This indicates volatility in the company's market value over the five-year span.
- Invested Capital
- Invested capital demonstrated a steady upward trend throughout the period. Starting at approximately 4.63 billion in 2017, it rose consistently each year, reaching about 7.45 billion by 2021. This trend suggests a continuous increase in the capital invested in the company's operations or assets.
- MVA Spread Ratio
- The MVA spread ratio shows significant variation across the years. It started at a high level of 424.12% in 2017 but decreased to 342.19% in 2018. Subsequently, it increased to 449% in 2019 and surged dramatically to a peak of 860.97% in 2020. However, in 2021, it dropped sharply to 310.46%. This ratio indicates changes in the value generated over the invested capital, with a remarkable spike in 2020 followed by considerable contraction in the following year.
- Overall Financial Insights
- The data reflects a pattern of growing invested capital alongside fluctuating market value performance. The sharp increase in MVA and MVA spread ratio in 2020 suggests an exceptional year in terms of market valuation relative to capital invested, while the subsequent decline in 2021 indicates decreased market performance or valuation adjustments. The steady growth in invested capital implies ongoing investment activities despite the variability observed in market valuation metrics.
MVA Margin
Twitter Inc., 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 | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenue | ||||||
| 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: 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 ÷ Adjusted revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
The analysis of the financial performance over the periods ending December 31 from 2017 to 2021 reveals several noteworthy trends regarding market value added (MVA), adjusted revenue, and MVA margin.
- Market Value Added (MVA)
- The MVA exhibited fluctuations across the five-year span. Starting at approximately 19.6 billion US dollars in 2017, it decreased to about 17.7 billion in 2018. This decline was followed by a recovery to roughly 23.7 billion in 2019, and a significant surge to over 51.4 billion in 2020. However, the value dropped sharply again in 2021 to approximately 23.1 billion. The marked peak in 2020 suggests a year of exceptional market valuation enhancement, but the subsequent decline indicates volatility or potential challenges impacting market perception or value realization.
- Adjusted Revenue
- Adjusted revenue demonstrated consistent growth throughout the period. Beginning at nearly 2.44 billion US dollars in 2017, it increased steadily each year, reaching approximately 3.05 billion in 2018, 3.49 billion in 2019, 3.71 billion in 2020, and finally 5.09 billion in 2021. This steady upward trajectory indicates strengthening operational performance and revenue generation capabilities over the five years.
- MVA Margin
- The MVA margin, expressed in percentage terms, mirrored some volatility seen in the MVA values. Initially very high in 2017 at 805.25%, it declined significantly to 581.06% in 2018 before recovering to 680.35% in 2019. There was a substantial peak in 2020 at 1385.71%, aligning with the highest MVA value, implying exceptional market value creation relative to revenue that year. In 2021, the margin declined to 453.98%, the lowest in the reported period, reflecting a reduced ability to convert revenue growth into market value added after the exceptional 2020 performance.
Overall, the data indicates robust revenue growth accompanied by notable volatility in market value added and MVA margin. The exceptional peak in 2020 across MVA and margin metrics suggests an extraordinary event or market condition positively affecting value creation. Nevertheless, the decline in 2021 highlights challenges in sustaining that elevated market value advantage despite continued revenue growth.