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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Amgen Inc. pages available for free this week:
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Dividend Discount Model (DDM)
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
- Analysis of Revenues
- Analysis of Debt
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MVA
Amgen 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 Amgen
- The market value exhibited a slight decline from 172,159 million US$ in 2020 to 162,173 million US$ in 2022. Subsequently, there was a significant increase reaching 219,464 million US$ in 2023, followed by a minor decrease to 213,893 million US$ in 2024. Overall, the market value shows a recovery and growth trend in the latter years after initial contraction.
- Invested capital
- Invested capital remained fairly stable around 38,000 to 40,000 million US$ from 2020 to 2022 but rose sharply to 69,976 million US$ in 2023 before decreasing to 63,169 million US$ in 2024. This pattern indicates a significant capital expansion in 2023, partially reversed the following year, suggesting possible major investments or asset acquisitions in 2023 with some divestitures or write-downs in 2024.
- Market value added (MVA)
- Market value added followed a declining trend from 133,383 million US$ in 2020 down to approximately 122,451 million US$ in 2022, reflecting lower value creation during this period. However, a strong rebound is observed in 2023 and 2024, reaching 149,488 million US$ and 150,724 million US$ respectively. This suggests an improvement in market perception and value generation relative to invested capital in the later years.
- Overall observations
- The data reveals a period of stability to decline in both market value and market value added during the early years, accompanied by relatively flat invested capital. The sharp increase in invested capital in 2023 correlates with a marked improvement in market value and MVA, suggesting that the company’s investments during this period were positively received by the market. Slight reductions in 2024 values indicate a moderation but maintain overall improvement compared to the early years. The financial measures collectively suggest a phase of strategic investment followed by enhanced value creation and market confidence.
MVA Spread Ratio
Amgen 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 | ||||||
| AbbVie Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals 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 (MVA) shows a fluctuating trend over the five-year period. It started at 133,383 million US dollars in 2020 and decreased to 122,303 million in 2021, remaining relatively stable at 122,451 million in 2022. From 2023 onwards, there was a notable increase, reaching 149,488 million in 2023 and slightly rising to 150,724 million in 2024. This indicates a recovery and growth in the company's value addition to shareholders after a dip in the earlier years.
- Invested Capital
-
The invested capital figures exhibit a steady increase from 38,776 million US dollars in 2020 to 40,247 million in 2021, followed by a slight decrease to 39,722 million in 2022. A significant jump occurred in 2023, where invested capital surged to 69,976 million, before decreasing to 63,169 million in 2024. This suggests a considerable expansion in capital investment during 2023, potentially signaling major investments or acquisitions followed by a partial reduction or revaluation in the following year.
- MVA Spread Ratio
-
The MVA spread ratio shows a declining trend over the observed period. It was highest in 2020 at approximately 344%, then decreased to about 304% in 2021 and slightly increased to around 308% in 2022. After 2022, the ratio sharply decreased, falling to approximately 214% in 2023, with a slight recovery to 239% in 2024. Despite this recent improvement, the ratio remains significantly lower than the initial years, indicating a reduced spread between market value added and invested capital, which may suggest lower efficiency or returns on new investments over time.
MVA Margin
Amgen 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 | ||||||
| Product sales | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| AbbVie Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals 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 ÷ Product sales
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial data reveals several distinct trends over the five-year period ending in 2024.
- Market Value Added (MVA)
- The MVA shows some variability across the years, beginning at 133,383 million US dollars in 2020, then decreasing slightly in both 2021 and 2022 to around 122,300 million. A notable rebound occurs in 2023, with MVA rising to 149,488 million, followed by a slight increase to 150,724 million in 2024. This pattern indicates initial contraction in market value added, succeeded by a strong recovery and stabilization at a higher level.
- Product Sales
- Product sales exhibit a consistent upward trend throughout the period. Starting at 24,240 million US dollars in 2020, sales increase incrementally each year, reaching 32,026 million by 2024. The growth appears steady, with a more pronounced rise observed in the last reported year, suggesting expanding market demand or enhanced product performance.
- MVA Margin
- The MVA margin percentage displays fluctuations over the years. Initially, it was quite high at 550.26% in 2020, then decreases over the next two years to approximately 494% by 2022. A subsequent increase to 555.51% in 2023 indicates improved efficiency or value creation relative to sales, but this is followed by a decline to 470.63% in 2024. Overall, the margin indicates strong value addition relative to product sales, despite some volatility.
In summary, product sales have steadily increased each year, signaling positive operational performance. The market value added experienced a dip in the middle years followed by a solid recovery, while the MVA margin showed variability, reflecting changes in value generation efficiency relative to sales. These trends collectively suggest a business environment with growth opportunities and fluctuating value creation metrics over the analyzed period.