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: Assets
- Common-Size Balance Sheet: Assets
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Selected Financial Data since 2005
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) since 2005
- Price to Book Value (P/BV) since 2005
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MVA
United Rentals Inc., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2022-12-31), 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).
1 Fair value of debt. See details »
2 Invested capital. See details »
The financial data reveals a consistent upward trend in all key financial metrics from 2018 through 2022.
- Market (fair) value
- The market value of United Rentals showed steady growth each year, increasing from $21,160 million in 2018 to $38,876 million in 2022. This represents a substantial rise, reflecting increased market capitalization and possibly improved investor sentiment or operational performance over the five-year period.
- Invested capital
- Invested capital experienced a minor decline in 2020, dropping from $18,200 million in 2019 to $17,027 million, but then resumed growth in subsequent years, reaching $22,485 million by the end of 2022. The initial dip may indicate asset disposals, efficiency improvements, or restructuring during 2020, followed by renewed investments or asset accumulation afterwards.
- Market value added (MVA)
- MVA showed the most pronounced growth trend, rising from $3,288 million in 2018 to $16,391 million in 2022. This increase highlights a growing premium of the market value over the invested capital, suggesting enhanced value creation for shareholders over time. The sharp increase in 2020 and subsequent years indicates strong market confidence relative to the capital invested.
Overall, the data points to robust growth in the company’s valuation and value creation from 2018 to 2022, accompanied by strategic investment patterns as reflected in the invested capital movements. The increasing gap between market value and invested capital, as measured by MVA, signals successful capital deployment and positive market perception during this period.
MVA Spread Ratio
United Rentals Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
Based on: 10-K (reporting date: 2022-12-31), 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).
1 MVA. See details »
2 Invested capital. See details »
3 2022 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added increased consistently from 2018 to 2022, starting at $3,288 million in 2018 and reaching $16,391 million in 2022. This represents a significant growth, indicating enhanced value creation over the five-year period. Notably, the increase accelerated between 2019 and 2020, and continued to grow, though the growth rate slightly slowed between 2021 and 2022.
- Invested Capital
- Invested capital showed fluctuations over the period. It was $17,871 million in 2018, rose slightly to $18,200 million in 2019, but then decreased to $17,027 million in 2020. From 2020 onward, there was a steady increase, reaching $22,485 million in 2022. This suggests a period of cautious capital investment during 2020, followed by renewed investment growth aligning with increasing market value added.
- MVA Spread Ratio
- The MVA spread ratio exhibited a strong upward trend from 18.4% in 2018 to a peak of 74.06% in 2021, indicating progressively improved efficiency in value creation relative to invested capital. Although the ratio slightly declined to 72.9% in 2022, it remained substantially higher than in earlier years, signaling sustained favorable returns on invested capital.
MVA Margin
United Rentals Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Revenues | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenues | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
Based on: 10-K (reporting date: 2022-12-31), 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).
1 MVA. See details »
2 2022 Calculation
MVA margin = 100 × MVA ÷ Adjusted revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added showed a robust and consistent growth trend throughout the analyzed period. Starting at 3,288 million US dollars in 2018, MVA increased substantially each year, reaching 16,391 million US dollars by the end of 2022. This represents a near fivefold increase over five years, indicating strong value creation for the shareholders.
- Adjusted Revenues
- Adjusted revenues also demonstrated growth, albeit with some fluctuation. Revenues rose from 8,057 million US dollars in 2018 to 9,350 million in 2019, then declined to 8,526 million in 2020. Following this dip, there was a recovery and steady increase, reaching 11,690 million US dollars at the end of 2022. This pattern suggests some instability around 2020, potentially due to external factors affecting sales, but a strong recovery thereafter.
- MVA Margin
- The MVA margin exhibited a marked upward trend, moving from 40.81% in 2018 to over 140% in recent years. After a considerable increase from 2018 to 2019, there was a dramatic rise in 2020 to 128.38%, followed by further increases to 144.49% in 2021 and 140.22% in 2022. This sharp rise indicates that the company's market value growth significantly outpaced revenue growth, reflecting enhanced efficiency, profitability, or investor confidence.