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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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Enterprise Value to EBITDA (EV/EBITDA)
- Net Profit Margin since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Revenues
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MVA
United Parcel Service 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 UPS
- The market value shows a fluctuating but overall declining trend from 2021 onwards. After increasing from 171,119 million US$ in 2020 to a peak of 210,277 million US$ in 2021, the value declined steadily each year, reaching 123,076 million US$ by the end of 2024. This represents a significant reduction of approximately 41% from the 2021 high, indicating decreased market confidence or valuation pressures over the observed period.
- Invested capital
- Invested capital exhibits consistent but modest growth across the five-year span. It increased from 33,181 million US$ at the end of 2020 to 48,150 million US$ by the close of 2024. This upward movement suggests ongoing investments and capital allocation, with a total increase of about 45% over the five years, reflecting sustained commitment to the company's asset base or operational capacity.
- Market Value Added (MVA)
- The Market Value Added mirrors the market value trend, showing initial growth followed by a decline. MVA rose from 137,938 million US$ in 2020 to a high of 165,881 million US$ in 2021. Thereafter, it decreased steadily to 74,926 million US$ by 2024, roughly a 55% decline from the peak. This indicates that the market's valuation premium over invested capital has diminished substantially, pointing to reduced investor value creation or a reassessment of the company's growth prospects during the latter years.
MVA Spread Ratio
United Parcel Service 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 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings 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 shows a declining trend over the five-year period. Starting at 137,938 million USD in 2020, it increased to a peak of 165,881 million USD in 2021. However, from 2021 onwards, there is a continuous decrease, reaching 74,926 million USD by the end of 2024. This indicates a reduction in the market’s perception of value creation relative to invested capital over time.
- Invested Capital
- Invested capital reflects a steady upward trend across the years. Beginning at 33,181 million USD in 2020, it increased significantly to 44,396 million USD in 2021, and then showed gradual growth through 2024, ending at 48,150 million USD. This suggests ongoing capital investment or accumulation within the company.
- MVA Spread Ratio
- The MVA spread ratio, representing the relative market return over invested capital, shows a continuous decline from 415.72% in 2020 to 155.61% in 2024. This steady decrease aligns with the trend observed in market value added, indicating diminishing returns on the invested capital over the period analyzed.
- Overall Analysis
- The data suggest that while the company has consistently increased its invested capital annually, the market’s added value and the return spread have both contracted over the last few years. The decreasing MVA and MVA spread ratio imply challenges in generating proportional market value gains to match the rising capital base. This downward trajectory could signal either market concerns about future profitability or a need for improved operational efficiency to enhance value creation relative to the invested resources.
MVA Margin
United Parcel Service 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 | ||||||
| Revenue | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings 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 ÷ Revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added exhibits a declining trend over the observed period, decreasing notably from 137,938 million USD in 2020 to 74,926 million USD in 2024. The highest value occurred in 2021 at 165,881 million USD, followed by a consistent year-on-year reduction through to 2024.
- Revenue
- Revenue increased from 84,628 million USD in 2020 to its peak of 100,338 million USD in 2022. However, subsequent years showed a decline to 90,958 million USD in 2023, with a slight increase to 91,070 million USD in 2024, indicating some stabilization but remaining below the 2022 peak.
- MVA Margin
- The MVA margin percentage follows a downward trajectory throughout the five-year span, peaking at 170.51% in 2021 before declining sharply to 82.27% in 2024. This suggests that value creation relative to revenue has significantly decreased, especially from 2022 onwards.