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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- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Aggregate Accruals
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MVA
Synopsys Inc., MVA calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of Synopsys
- The market value experienced a significant upward trend from 2019 through 2021, nearly doubling from approximately 21.8 billion to 56.1 billion USD. In 2022, this value declined to around 51.5 billion USD, followed by a sharp increase in 2023 to approximately 86.8 billion USD. The most recent figure in 2024 indicates a decrease to about 76.8 billion USD, which remains substantially higher than earlier years.
- Invested capital
- Invested capital rose steadily over the period examined. Starting at approximately 5.9 billion USD in 2019, it increased each year, reaching around 10.3 billion USD by 2024. This consistent upward movement highlights ongoing investment and growth in the company's capital base.
- Market value added (MVA)
- The market value added metric mirrored the fluctuations seen in overall market value but on a larger scale relative to invested capital. It began at roughly 16.0 billion USD in 2019, jumped to over 31.1 billion USD in 2020, and continued to significantly increase to near 49.2 billion USD in 2021. A decline occurred in 2022 to about 43.8 billion USD, followed by a substantial rise to nearly 78.7 billion USD in 2023. The 2024 value dropped to approximately 66.5 billion USD but remains elevated compared to prior years.
- Overall insights
- The data reflects dynamic changes in the company's valuation over the six-year period, characterized by strong growth interrupted by periodic declines in the later years. The expansion in invested capital suggests ongoing resource allocation towards growth initiatives. Meanwhile, market value added has generally increased, indicating that the company has been successful in generating value beyond the capital invested. The volatility apparent in the most recent years may warrant further investigation to understand underlying causes and potential implications.
MVA Spread Ratio
Synopsys Inc., MVA spread ratio calculation, comparison to benchmarks
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| 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. | |||||||
| Workday Inc. | |||||||
Based on: 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31).
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 demonstrates significant growth from 2019 to 2021, increasing from approximately $15.96 billion to nearly $49.16 billion. This upward trend peaks in 2021, followed by a decline in 2022 to around $43.77 billion. Subsequently, the MVA shows a strong rebound in 2023, reaching a new high of approximately $78.68 billion, but experiences a decline again in 2024 to about $66.52 billion. Overall, this indicates volatility with an overarching upward trend and fluctuations in the later years.
- Invested Capital
- Invested Capital exhibits a steady upward trajectory across the entire measured period, growing from roughly $5.86 billion in 2019 to over $10.31 billion by 2024. This steady increase suggests continuous reinvestment and asset expansion over the years, with the most notable rise occurring between 2023 and 2024.
- MVA Spread Ratio
- The MVA spread ratio, reflecting the ratio of market value added relative to invested capital, follows a similar growth pattern to MVA but with even more pronounced peaks and troughs. Beginning at 272.11% in 2019, it sharply rises to a peak of 707.79% in 2021. After a decline in 2022 to 565.55%, the ratio surges impressively to 973.25% in 2023, indicating a high level of market value spread relative to capital invested during that year. In 2024, the ratio decreases to 645.36%, suggesting a moderation but still maintaining a strong positive spread compared to earlier years.
- Overall Analysis
- The data indicates robust growth in both market value added and invested capital over the six-year period, though market value shows more volatility in comparison to invested capital. The substantial increases in the MVA spread ratio, especially in 2021 and 2023, highlight periods where the added market value significantly outpaced invested capital, signaling strong value creation. However, the fluctuations in both MVA and the spread ratio in 2022 and 2024 suggest some challenges or market adjustments impacting perceived value. The continual rise in invested capital confirms ongoing investment efforts supporting the company’s growth strategy.
MVA Margin
Synopsys Inc., MVA margin calculation, comparison to benchmarks
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Market value added (MVA)1 | |||||||
| Revenue | |||||||
| Add: Increase (decrease) in deferred revenue | |||||||
| Adjusted revenue | |||||||
| 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. | |||||||
| Workday Inc. | |||||||
Based on: 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31).
1 MVA. See details »
2 2024 Calculation
MVA margin = 100 × MVA ÷ Adjusted revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added demonstrates an overall upward trajectory from 2019 to 2024, indicating an increase in the company's market value relative to invested capital. Starting at approximately 15.96 billion USD in 2019, MVA more than doubled to over 31 billion USD by 2020, and continued rising significantly to nearly 49.16 billion USD in 2021. However, in 2022 there was a noticeable decline to roughly 43.77 billion USD, followed by a sharp rebound in 2023 reaching approximately 78.68 billion USD. In 2024, the MVA declined again but remained elevated at around 66.52 billion USD. These fluctuations suggest periods of market revaluation, with strong recovery phases succeeding a dip in 2022.
- Adjusted Revenue
- The adjusted revenue exhibits a consistent year-over-year increase throughout the six-year span. Beginning at about 3.39 billion USD in 2019, revenue grew steadily each year to 3.88 billion USD in 2020 and 4.37 billion USD in 2021. Thereafter, it accelerated, reaching approximately 5.49 billion USD in 2022 and continuing upward to 5.73 billion USD in 2023 and 6.15 billion USD in 2024. This steady revenue growth reflects ongoing business expansion and potentially improved operational performance.
- MVA Margin
- The MVA margin, expressed as a percentage, closely parallels the trend observed in Market Value Added but demonstrates more pronounced volatility. Starting at 470.26% in 2019, it increased sharply in 2020 to 803.94% and further surged to 1126.17% in 2021. A significant drop occurred in 2022, where the margin decreased to 796.87%, followed by a substantial increase to 1373.41% in 2023, marking the peak of the period. In 2024, the margin declined again to 1081.63%. This pattern indicates varying degrees of market capitalization efficiency relative to adjusted revenue, with notable peaks and troughs suggesting market or operational factors influencing value creation at different intervals.
- Summary
- The data reflects a generally positive financial trend characterized by consistent revenue growth alongside significant, albeit fluctuating, increases in market valuation metrics. The periods of decline in Market Value Added and MVA margin, particularly in 2022 and 2024, may warrant further investigation into external market conditions or internal company factors. Nevertheless, the overall pattern suggests effective value creation supported by expanding revenue streams.