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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- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Operating Profit Margin since 2005
- Analysis of Debt
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MVA
Netflix Inc., MVA calculation
US$ in thousands
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 »
The financial data reflects significant fluctuations and overall growth in the market value and invested capital of the company over the analyzed period. The company's market (fair) value exhibits notable variability, with an initial decline followed by a pronounced recovery and substantial increase in the final reported year.
- Market (fair) value
- Between December 31, 2020, and December 31, 2021, the market value decreased significantly from approximately 259.6 billion US dollars to 192.4 billion US dollars, indicating a decline in market capitalization or investor valuation during that time frame.
- This downward trend continued into December 31, 2022, with the market value further declining to about 178.3 billion US dollars.
- However, a strong recovery is observed by December 31, 2023, where the market value surged to approximately 264.3 billion US dollars, surpassing the initial 2020 figure.
- The upward trajectory solidified by December 31, 2024, with the market value increasing sharply to 432.3 billion US dollars, representing significant growth and potentially reflecting improved market sentiment or company performance.
- Invested capital
- The invested capital has shown a steady increase throughout the period analyzed.
- Starting at around 29.8 billion US dollars at the end of 2020, it rose to approximately 34.8 billion US dollars by December 31, 2021.
- Invested capital growth continued, albeit at a slower pace, reaching 37.8 billion US dollars in 2022 and remaining relatively stable in 2023 with a slight increase to about 37.9 billion US dollars.
- The trend of growth reasserted itself in 2024 with invested capital reaching approximately 40.7 billion US dollars, marking consistent investment or asset growth over the five-year period.
- Market Value Added (MVA)
- The Market Value Added, representing the difference between market value and invested capital, reflects similar trends to the market value but highlights value creation relative to capital invested.
- Starting at approximately 229.8 billion US dollars in 2020, MVA decreased sharply to about 157.6 billion US dollars in 2021 and further to 140.5 billion US dollars in 2022, indicating reduced value creation or market confidence relative to invested capital.
- This trend reversed in 2023 with MVA rising to around 226.3 billion US dollars, demonstrating regained market value creation.
- A dramatic increase occurred in 2024, with MVA reaching approximately 391.6 billion US dollars, signifying substantial added value and strong market performance relative to the invested capital base.
Overall, the data suggests an initial period of contraction or market reevaluation followed by a robust recovery and significant growth in market valuation and value creation relative to invested capital. The steady increase in invested capital further indicates ongoing resource allocation to support business operations or expansion.
MVA Spread Ratio
Netflix 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 thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
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.
The financial data indicates notable fluctuations in key value creation metrics over the five-year period ending in 2024.
- Market Value Added (MVA)
- The MVA experienced a significant decline from 229.79 billion USD in 2020 to 140.47 billion USD in 2022, reflecting a reduction in the market's perception of the company's value beyond its invested capital. However, this trend reversed subsequently, with MVA increasing sharply to 226.35 billion USD in 2023 and further accelerating to 391.61 billion USD in 2024, suggesting renewed investor confidence and market value appreciation.
- Invested Capital
- Invested capital showed a steady growth trajectory throughout the observed period, rising from 29.76 billion USD in 2020 to 40.71 billion USD in 2024. This consistent increase indicates ongoing capital deployment in the company's operations and potential expansion efforts.
- MVA Spread Ratio
- This ratio, representing the relationship between MVA and invested capital, followed a pattern similar to MVA. It declined from 772.09% in 2020 to 371.80% in 2022, reflecting diminished value creation relative to invested capital. Subsequently, it improved significantly, reaching 961.89% by 2024, which denotes enhanced efficiency in generating market value from the invested capital base.
Overall, the data illustrates that despite an initial contraction in market value creation between 2020 and 2022, the latter years demonstrated a strong recovery and improvement in both absolute market value added and the relative value generation efficiency. The consistent increase in invested capital supports the company’s capacity to sustain growth and value creation moving forward.
MVA Margin
Netflix 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 thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Revenues | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenues | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
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 ÷ Adjusted revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial data reveals several notable trends over the five-year period analyzed. Market value added (MVA) exhibited fluctuation with a decline from 2020 through 2022, decreasing substantially from approximately $229.8 billion to $140.5 billion. However, there is a marked recovery in the subsequent years, with MVA rising sharply to about $226.3 billion in 2023 and continuing strong growth to nearly $391.6 billion by the end of 2024.
Adjusted revenues show a consistent upward trajectory throughout the period. Starting at approximately $25.2 billion in 2020, the revenues increased each year, reaching around $39.1 billion by the end of 2024. This steady growth in revenues indicates a positive sales performance and possibly expansion of market reach or product offerings.
The MVA margin, which expresses the market value added as a percentage of revenues, displays a similar pattern to the MVA itself. After a high margin of approximately 912% in 2020, it decreased significantly to around 444% by 2022. This decline suggests the company was generating less market value relative to its revenues during those years. The margin then recovered impressively to 668% in 2023 and soared to over 1002% in 2024, indicating an improved ability to create market value relative to revenues in the later years.
- Market Value Added (MVA)
- Decreased initially from 2020 to 2022, then recovered strongly in 2023 and 2024.
- Adjusted Revenues
- Consistently increased every year, showing steady revenue growth with no decline.
- MVA Margin
- Fell significantly in the mid-period, then rebounded to reach the highest level in the final year observed, reflecting enhanced value creation relative to revenues.
Overall, the data suggests a period of initial challenges or reduced market value creation efficiency followed by a recovery and strengthening financial position. The consistent revenue growth combined with the late-period improvement in MVA margin highlights a strengthening capacity to translate revenues into market value, possibly reflecting strategic improvements or favorable market conditions.