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.
MVA
Cisco Systems Inc., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2024-07-27), 10-K (reporting date: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of Cisco
- The market value exhibited notable fluctuations over the observed period. Initially, there was a decline from 211,282 million USD in mid-2019 to 174,151 million USD by mid-2020. This was followed by a significant recovery, reaching a peak of 246,684 million USD in mid-2021. Subsequently, the market value declined again to 185,576 million USD in mid-2022, then increased to 223,972 million USD in mid-2023 before slightly decreasing to 218,245 million USD in mid-2024. Overall, the market value showed volatility with intermittent recoveries.
- Invested capital
- Invested capital demonstrated a generally steady upward trend from 53,469 million USD in mid-2019 to 59,479 million USD in mid-2023. A substantial increase was observed in mid-2024, with invested capital rising sharply to 91,785 million USD. This sudden increase in invested capital may indicate significant additional investments or acquisitions during the most recent period.
- Market value added (MVA)
- Market value added, representing the difference between market value and invested capital, mirrored the volatility seen in market value. It decreased from 157,813 million USD in mid-2019 to 120,653 million USD in mid-2020, followed by a sharp rise to 189,224 million USD in mid-2021. Afterwards, it declined again to 126,513 million USD in mid-2022, rose to 164,993 million USD in mid-2023, and then dropped to 126,460 million USD in mid-2024. The MVA declined markedly in the latest period despite a significant increase in invested capital, implying a less favorable market perception relative to the capital deployed.
MVA Spread Ratio
Cisco Systems Inc., MVA spread ratio calculation, comparison to benchmarks
| Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Jul 25, 2020 | Jul 27, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Market value added (MVA)1 | 126,460) | 164,993) | 126,513) | 189,224) | 120,653) | 157,813) | |
| Invested capital2 | 91,785) | 58,979) | 59,063) | 57,460) | 53,498) | 53,469) | |
| Performance Ratio | |||||||
| MVA spread ratio3 | 137.78% | 279.75% | 214.20% | 329.31% | 225.53% | 295.15% | |
| Benchmarks | |||||||
| MVA Spread Ratio, Competitors4 | |||||||
| Apple Inc. | 6,597.47% | 4,423.16% | 5,157.62% | 5,626.48% | 4,945.07% | 2,012.85% | |
| Arista Networks Inc. | 2,039.51% | 1,575.63% | 1,226.33% | 1,872.91% | 1,070.87% | — | |
| Dell Technologies Inc. | 100.40% | 2.11% | 31.48% | 53.40% | 12.25% | — | |
| Super Micro Computer Inc. | 281.28% | 466.63% | 91.12% | 50.17% | 20.30% | 2.42% | |
Based on: 10-K (reporting date: 2024-07-27), 10-K (reporting date: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27).
1 MVA. See details »
2 Invested capital. See details »
3 2024 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 126,460 ÷ 91,785 = 137.78%
4 Click competitor name to see calculations.
The financial data over the six-year period reveals fluctuating trends in key financial metrics. The market value added (MVA), a measure indicative of value creation over invested capital, shows significant variability without a consistent upward or downward trajectory. After peaking in mid-2021 at approximately 189 billion US dollars, the MVA declined notably in the following years, with a marked decrease by mid-2024.
Invested capital demonstrates a generally increasing trend from 2019 through 2024, with a moderate rise year over year until 2023, followed by a sharp increase in 2024. This suggests escalating investments into the company's operations or assets, especially pronounced in the final recorded period.
The MVA spread ratio, reflecting the efficiency of value creation relative to the invested capital, parallels the MVA's volatility. It reached its zenith in 2021, followed by a substantial contraction by 2024. This decline indicates a reduced rate of return or value creation efficiency despite the increase in invested capital observed in 2024.
- Market Value Added (MVA)
- Fluctuated significantly, peaking in 2021 before declining markedly through 2024.
- Invested Capital
- Exhibited a steady increase annually with a notable jump in 2024, suggesting heightened investment activity.
- MVA Spread Ratio
- Mirrored MVA trends with a peak in 2021, followed by a decrease, signaling diminished capital efficiency.
Overall, the data indicates that while invested capital increased, the company’s value creation efficiency and absolute market value added did not sustain growth in the later years. This could point to challenges in translating investments into proportional market value, warranting further investigation into operational or market factors influencing performance during this period.
MVA Margin
Cisco Systems Inc., MVA margin calculation, comparison to benchmarks
| Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Jul 25, 2020 | Jul 27, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Market value added (MVA)1 | 126,460) | 164,993) | 126,513) | 189,224) | 120,653) | 157,813) | |
| Revenue | 53,803) | 56,998) | 51,557) | 49,818) | 49,301) | 51,904) | |
| Add: Increase (decrease) in deferred revenue | 2,925) | 2,286) | 1,100) | 1,718) | 1,979) | (1,218) | |
| Adjusted revenue | 56,728) | 59,284) | 52,657) | 51,536) | 51,280) | 50,686) | |
| Performance Ratio | |||||||
| MVA margin2 | 222.92% | 278.31% | 240.26% | 367.17% | 235.28% | 311.35% | |
| Benchmarks | |||||||
| MVA Margin, Competitors3 | |||||||
| Apple Inc. | 843.30% | 695.76% | 609.53% | 653.71% | 648.08% | 392.95% | |
| Arista Networks Inc. | 1,444.26% | 1,189.41% | 844.93% | 1,097.06% | 835.18% | — | |
| Dell Technologies Inc. | 61.61% | 1.17% | 16.47% | 45.88% | 10.39% | — | |
| Super Micro Computer Inc. | 142.99% | 158.10% | 38.75% | 18.09% | 7.53% | 0.78% | |
Based on: 10-K (reporting date: 2024-07-27), 10-K (reporting date: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27).
1 MVA. See details »
2 2024 Calculation
MVA margin = 100 × MVA ÷ Adjusted revenue
= 100 × 126,460 ÷ 56,728 = 222.92%
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added exhibited considerable fluctuations over the analyzed periods. Beginning at $157,813 million in 2019, it declined to $120,653 million in 2020, increased markedly to $189,224 million in 2021, then decreased again to $126,513 million in 2022. This was followed by a rise to $164,993 million in 2023, and a subsequent decline to $126,460 million in 2024. The overall pattern indicates volatility without a consistent upward or downward trajectory.
- Adjusted Revenue
- Adjusted revenue showed a generally positive trend, albeit with some variability. It started at $50,686 million in 2019, increased slightly in 2020 and 2021 to $51,280 million and $51,536 million respectively, then rose more substantially to $52,657 million in 2022. The highest figure was recorded in 2023 at $59,284 million. This peak was followed by a decline to $56,728 million in 2024. The revenue growth over the period is positive but with an observable dip in the most recent year.
- MVA Margin
- The MVA margin percentage followed a pattern similar to MVA, with notable volatility. In 2019, it was at 311.35%, decreasing to 235.28% in 2020. It sharply increased to 367.17% in 2021, then declined again to 240.26% in 2022. The margin experienced a recovery to 278.31% in 2023 before dropping to 222.92% in 2024. This indicates fluctuations in market value added relative to revenue, reflecting varying efficiency or market perceptions over time.
- Summary
- Overall, the data reveal cyclical variations in market value added and MVA margin, which do not consistently align with the more steadily increasing trend in adjusted revenue. The disparities suggest that factors beyond revenue growth, such as market conditions or investor sentiment, significantly influenced market value. Recently, despite a relatively strong revenue base, both market value added and MVA margin have declined, indicating potential concerns regarding market valuation or profitability effectiveness.