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 Liquidity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Debt to Equity since 2005
- Price to Operating Profit (P/OP) since 2005
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MVA
Union Pacific Corp., 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 UPC
- The market value exhibited fluctuations over the five-year period. Starting at approximately $170.2 billion at the end of 2020, it increased to nearly $189.0 billion in 2021, suggesting positive market sentiment or improved financial outlook that year. However, in 2022, the market value declined substantially to about $155.4 billion, indicating potential challenges or market corrections during that period. The value rebounded in 2023 to roughly $182.2 billion but decreased slightly again to approximately $172.8 billion by the end of 2024. Overall, the market value showed volatility with an initial growth, a significant dip in 2022, a recovery in 2023, and a modest decline thereafter.
- Invested Capital
- The invested capital demonstrated a steady upward trend over the observed period. Beginning at $58.3 billion in 2020, it remained relatively stable in 2021, then increased progressively each subsequent year, reaching approximately $62.0 billion by the end of 2024. This consistent growth suggests ongoing investment in operations, assets, or infrastructure, reflecting a commitment to expansion or maintenance of the company's productive capacity.
- Market Value Added (MVA)
- MVA, representing the difference between the market value and invested capital, exhibited a trend similar to the market value but moderated by the steady invested capital growth. It rose from about $111.9 billion in 2020 to a peak of $130.8 billion in 2021, indicating substantial value creation for shareholders. Then, it dropped sharply to $95.7 billion in 2022, reflecting the decline in market value and possibly signaling reduced perceived value creation. The MVA improved to $120.7 billion in 2023, paralleling the market value rebound, before slightly declining to $110.8 billion in 2024. This pattern indicates the company’s value creation experienced fluctuations largely driven by market valuation changes rather than changes in invested capital.
MVA Spread Ratio
Union Pacific Corp., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service 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.
- Market Value Added (MVA)
- The Market Value Added exhibited fluctuations over the five-year period. It increased from 111,883 million US dollars in 2020 to a peak of 130,750 million US dollars in 2021. Subsequently, it declined significantly to 95,674 million US dollars in 2022, followed by a recovery to 120,669 million US dollars in 2023. However, the value experienced a slight decrease again in 2024, reaching 110,793 million US dollars. This pattern indicates variable market perceptions of the company's value addition relative to invested capital.
- Invested Capital
- Invested capital demonstrated a gradual and steady increase throughout the period. Starting at 58,340 million US dollars in 2020, it remained relatively stable in 2021 at 58,241 million US dollars but then consistently rose to 59,751 million US dollars in 2022, 61,524 million US dollars in 2023, and 62,044 million US dollars in 2024. This trend suggests a continual strengthening of the company's capital base, reflecting ongoing investments or accumulation of productive assets.
- MVA Spread Ratio
- The MVA spread ratio, which reflects the relationship between market value added and invested capital, also showed variability corresponding with the changes in MVA. It increased from 191.78% in 2020 to a peak of 224.5% in 2021, indicating an improvement in value generation relative to capital invested. This ratio then declined to 160.12% in 2022, recovering to 196.13% in 2023 before falling again to 178.57% in 2024. The fluctuations in this ratio parallel the movements in market value added and imply intermittent changes in the company’s efficiency or market valuation effectiveness relative to the capital employed.
- Summary
- Overall, the company experienced fluctuating market value added and MVA spread ratios over the observed periods, reflecting changing market or operational conditions affecting perceived value creation. Despite these variations, invested capital steadily increased, suggesting ongoing investment in the business. The combination of these trends might indicate periods of strong market confidence oscillating with phases of reassessment or external challenges impacting valuation metrics.
MVA Margin
Union Pacific Corp., 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 | ||||||
| Operating revenues | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service 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 ÷ Operating revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added experienced fluctuations over the examined period. It initially increased from 111,883 million US dollars at the end of 2020 to a peak of 130,750 million in 2021. Subsequently, there was a notable decline to 95,674 million in 2022, followed by a rebound to 120,669 million in 2023. The value then slightly decreased again to 110,793 million by the end of 2024, indicating some volatility but generally remaining well above the starting level.
- Operating Revenues
- Operating revenues showed a consistent upward trend from 19,533 million US dollars in 2020 to 24,875 million in 2022. After a minor decrease to 24,119 million in 2023, revenues marginally increased again to 24,250 million in 2024. Overall, the revenue growth suggests steady operational performance with a brief plateau in the later years.
- MVA Margin
- The MVA margin, expressed as a percentage, followed a somewhat erratic pattern. It rose from 572.79% in 2020 to 599.66% in 2021, indicating improved value creation relative to operating revenues. However, it declined sharply to 384.62% in 2022, rebounded to 500.31% in 2023, and then decreased to 456.88% in 2024. These variations suggest fluctuations in efficiency or market perceptions impacting the relationship between market value added and revenues.