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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- Income Statement
- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- Common-Size Income Statement
- Analysis of Profitability Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Selected Financial Data since 2015
- Total Asset Turnover since 2015
- Price to Book Value (P/BV) since 2015
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MVA
PayPal Holdings 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 over the five-year period reveals notable fluctuations in the market value of the company. The market (fair) value exhibited substantial growth from 2018 through 2020, more than doubling from approximately 109 billion US dollars at the end of 2018 to over 326 billion US dollars by the end of 2020. However, this peak was followed by a marked decline in the subsequent years, with the value dropping to about 155 billion in 2021 and further reducing to approximately 102 billion by the end of 2022.
Invested capital showed a more consistent upward trend, increasing steadily each year from about 17.8 billion US dollars in 2018 to nearly 31.5 billion US dollars by 2022. This growth, though steady, is relatively moderate when contrasted with the volatility seen in the market value.
Market value added (MVA), which represents the difference between the market value and the invested capital, reflected a pattern similar to that of the market value. MVA rose significantly from around 91.4 billion in 2018 to a peak of nearly 296 billion in 2020. Subsequent years saw a reduction, with MVA falling to approximately 124 billion in 2021 and further decreasing to about 71 billion by the end of 2022. Despite these declines, the MVA remains significantly higher than the initial 2018 value, indicating the creation of considerable market value over the five-year span, notwithstanding the recent downward adjustment.
- Market (fair) value
- Increased substantially from 2018 to 2020, reaching a peak in 2020, followed by a significant decline in 2021 and 2022.
- Invested capital
- Showed steady and moderate growth over the period, with no major declines.
- Market value added (MVA)
- Mirrored the market value trend, rising sharply until 2020, then decreasing in the following two years but remained above the 2018 level.
In summary, the data illustrates an initial period of rapid expansion in market valuation that outpaced the growth in invested capital, creating substantial market value added. This period was followed by a significant correction in market value and MVA, while invested capital's gradual increase suggests ongoing investment activities despite the market downturn.
MVA Spread Ratio
PayPal Holdings 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 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday 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.
The financial data reveals several noteworthy trends over the five-year period ending in 2022.
- Market Value Added (MVA)
- There was a substantial increase in Market Value Added from 2018 to 2020, more than tripling from $91,390 million to $295,832 million. However, this peak was followed by a significant decline in the subsequent two years, falling to $123,653 million in 2021 and further to $70,630 million in 2022. This pattern indicates a period of rapid value creation followed by pronounced erosion of market value.
- Invested Capital
- Invested capital showed a steady upward trend over the period, increasing from $17,780 million in 2018 to $31,496 million in 2022. The growth in invested capital was consistent, although the rate of increase slowed somewhat in the later years, particularly between 2021 and 2022.
- MVA Spread Ratio
- The MVA spread ratio, which indicates the value created over and above invested capital expressed as a percentage, initially exhibited very strong growth, rising from 514.02% in 2018 to a peak of 977.63% in 2020. However, this ratio subsequently declined sharply to 394.84% in 2021 and further to 224.25% in 2022. While still positive, the decline suggests diminishing returns on invested capital over the latter part of the period.
Overall, the data reflects a period of rapid expansion and value creation culminating in 2020, followed by a marked downward adjustment. Despite increasing investment, the value generated relative to capital invested weakened considerably, implying challenges in sustaining high growth or market valuation beyond 2020.
MVA Margin
PayPal Holdings Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Net revenues | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday 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 revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added displayed a significant increase from 2018 to 2020, rising from approximately 91,390 million USD to 295,832 million USD. Following this peak in 2020, there was a sharp decline over the next two years, with MVA falling to 123,653 million USD in 2021 and further decreasing to 70,630 million USD in 2022. This indicates a period of substantial market valuation growth succeeded by a marked contraction.
- Net Revenues
- Net revenues showed a steady upward trend throughout the entire period analyzed. The values increased annually, from 15,451 million USD in 2018 to 27,518 million USD in 2022. This steady growth suggests continuous revenue expansion despite fluctuations in market valuation.
- MVA Margin
- The MVA margin exhibited a pattern similar to that of market value added, with a pronounced increase from 591.48% in 2018 to a peak of 1,378.91% in 2020. Subsequently, the margin sharply decreased to 487.38% in 2021 and further declined to 256.67% in 2022. This decline highlights reduced efficiency or market perception relative to revenues during the latter years, corresponding to the reduction seen in MVA.