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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United States Steel Corp. pages available for free this week:
- Income Statement
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Price to Operating Profit (P/OP) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Revenues
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MVA
United States Steel Corp., 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 notable fluctuations and trends over the five-year period ending December 31, 2022.
- Market (fair) value of U. S. Steel
- The market value declined from $6,424 million in 2018 to $5,375 million in 2019, highlighting a significant downturn. However, it rebounded sharply in 2020 to $10,050 million and continued a moderate upward trend, reaching $11,034 million in 2021 and slightly increasing to $11,147 million in 2022. This indicates a strong recovery and stabilization in market valuation following the 2019 low.
- Invested capital
- The invested capital showed consistent growth throughout the period. Starting at $6,762 million in 2018, it increased each year to $7,841 million in 2019, $8,622 million in 2020, followed by a marked rise to $12,346 million in 2021 and further growth to $12,723 million in 2022. This steady increase in capital investment suggests ongoing expansion or reinvestment initiatives within the company.
- Market Value Added (MVA)
- The MVA metric reflected considerable volatility. It was slightly negative at -$338 million in 2018 and worsened to -$2,466 million in 2019, indicating that the market valued the company below its invested capital during these years. A significant positive turnaround occurred in 2020, with MVA reaching $1,428 million, signaling that market valuation exceeded invested capital substantially. However, this positive momentum reversed in subsequent years, falling back into negative territory at -$1,312 million in 2021 and further declining to -$1,576 million in 2022. This oscillation suggests market uncertainty or shifts in investor perception after the 2020 peak.
MVA Spread Ratio
United States Steel Corp., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Freeport-McMoRan Inc. | ||||||
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 showed significant fluctuations during the analyzed period. It started with a negative value of -338 million US dollars at the end of 2018, worsening substantially to -2,466 million in 2019. In 2020, there was a notable recovery, with the MVA turning positive to 1,428 million. However, this improvement was not sustained, as the MVA again dropped to negative values of -1,312 million in 2021 and further to -1,576 million in 2022. Overall, the trend reflects considerable volatility with a brief positive peak in 2020 but predominantly negative market value added throughout the timeframe.
- Invested Capital
- Invested capital demonstrated a consistent upward trend across the periods. It increased steadily from 6,762 million US dollars in 2018 to 7,841 million in 2019, then reached 8,622 million in 2020. This growth accelerated in 2021, with invested capital rising to 12,346 million and continued expanding to 12,723 million in 2022. This consistent increase indicates ongoing capital investment in the business over the five-year period.
- MVA Spread Ratio
- The MVA spread ratio mirrored the volatility seen in the market value added figures. Starting at -4.99% in 2018, the ratio declined sharply to -31.45% in 2019, signaling a substantial negative spread. In 2020, there was a positive correction to 16.56%, indicating improved value creation relative to invested capital. However, this positive performance was not maintained, as the ratio returned to negative territory, registering -10.63% in 2021 and deteriorating further to -12.38% in 2022. The fluctuations suggest inconsistent returns on invested capital during the period analyzed.
MVA Margin
United States Steel Corp., 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 | ||||||
| Net sales | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Freeport-McMoRan Inc. | ||||||
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 ÷ Net sales
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial data reveals notable fluctuations in both market value added (MVA) and net sales over the five-year period.
- Market Value Added (MVA)
- MVA exhibited considerable volatility during the period. It started at a negative value of -338 million US dollars at the end of 2018, sharply decreased to -2466 million by the end of 2019, indicating a significant decline in market value creation. In 2020, there was a remarkable recovery with MVA turning positive to 1428 million, suggesting improved market perception or performance. However, this gain was not sustained as MVA returned to negative territory in 2021 and further declined slightly in 2022, ending at -1576 million. This oscillation reflects challenges in sustaining consistent market value growth.
- Net Sales
- Net sales showed an overall upward trend over the five years. Beginning at 14,178 million US dollars in 2018, there was a decline through 2019 and 2020, dropping to 12,937 and then to 9,741 million respectively. However, a significant rebound occurred in 2021 when sales more than doubled to 20,275 million and further increased slightly to 21,065 million in 2022. This recovery suggests strong demand or improved operational effectiveness in the latter years.
- MVA Margin
- The MVA margin mirrored the MVA fluctuations exhibiting considerable variability. Initially, the margin was negative at -2.38% in 2018 and worsened sharply to -19.06% in 2019. It reversed to a positive margin of 14.66% in 2020, indicating a period of value creation relative to sales. However, this was followed by negative margins of -6.47% and -7.48% in 2021 and 2022 respectively, correlating with the overall negative MVA in those years. The pattern indicates inconsistency in the company’s ability to generate market value proportional to its sales.