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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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Geographic Areas
- Selected Financial Data since 2005
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
- Price to Operating Profit (P/OP) since 2005
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MVA
Teradyne Inc., MVA calculation
US$ in thousands
Based on: 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), 10-K (reporting date: 2019-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of Teradyne
- The market value showed a significant increase from 2019 to 2020, rising from approximately $10.9 billion to $23.2 billion. However, in the subsequent years, the market value declined steadily to about $18.4 billion in 2021, $15.8 billion in 2022, and further to $15.6 billion in 2023. This indicates a peak in market valuation in 2020 followed by a consistent downward trend over the next three years.
- Invested capital
- The invested capital increased progressively between 2019 and 2022, growing from roughly $1.85 billion to $2.59 billion. In 2023, there was a slight decrease to approximately $2.42 billion. Overall, this reflects a general upward investment trend until 2022 with a modest contraction in the last reported year.
- Market value added (MVA)
- The market value added exhibited a similar pattern to the market value itself, rising sharply from about $9.1 billion in 2019 to $21.1 billion in 2020. Following this peak, the MVA declined to $15.9 billion in 2021, then decreased further to $13.2 billion in 2022 and slightly to $13.2 billion in 2023. The trend mirrors the market value changes, indicating that despite the increase in invested capital, the premium value attributed to the company's market valuation diminished in recent years.
MVA Spread Ratio
Teradyne Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2023 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added exhibited notable fluctuations over the analyzed periods. Starting at approximately 9.08 billion US dollars at the end of 2019, it more than doubled in 2020 to about 21.05 billion US dollars. However, a decline followed in subsequent years; the MVA decreased to approximately 15.85 billion in 2021, further dropped to around 13.21 billion in 2022, and remained relatively stable into 2023 with a slight decrease to about 13.18 billion US dollars. This trend indicates a significant peak in 2020 followed by a period of contraction and stabilization.
- Invested Capital
- Invested capital showed a gradual upward trend from about 1.85 billion US dollars at the end of 2019 to a peak of around 2.59 billion US dollars in 2022. In 2023, invested capital experienced a modest decline, falling to approximately 2.42 billion US dollars. Overall, the invested capital expanded steadily for most of the period, suggesting ongoing capital deployment before a slight pullback in the most recent year.
- MVA Spread Ratio
- The MVA spread ratio, reflecting the return spread over invested capital, peaked significantly at 964.23% in 2020, coinciding with the peak in market value added. Subsequently, it declined sharply to 618.28% in 2021, and continued its descent to 510.51% in 2022. In 2023, the ratio showed a modest recovery to 545.53%. This pattern implies a strong performance surge in 2020 followed by a marked reduction in value creation efficiency, with some recovery signs in the latest year.
- Summary of Trends
- The data indicates that despite steady growth in invested capital, market value added and MVA spread ratio experienced pronounced volatility, peaking in 2020 and then entering a contraction phase. The initial surge in market value added and efficiency metrics likely reflects extraordinary positive factors or market conditions in 2020, which were not sustained in the following years. The recent stabilization in market value added and slight improvement in spread ratio suggest a possible return to more normalized operating conditions and value creation capacity.
MVA Margin
Teradyne Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Revenues | ||||||
| Add: Increase (decrease) in deferred revenue and customer advances | ||||||
| Adjusted revenues | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 MVA. See details »
2 2023 Calculation
MVA margin = 100 × MVA ÷ Adjusted revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market value added (MVA)
- The market value added exhibited significant fluctuations over the five-year period. Starting at approximately 9.08 billion US dollars in 2019, it more than doubled to about 21.05 billion in 2020. However, this upward trend was not sustained, as MVA decreased to approximately 15.85 billion in 2021 and further declined to around 13.21 billion in 2022. The value remained relatively stable in 2023, slightly decreasing to approximately 13.18 billion.
- Adjusted revenues
- Adjusted revenues showed substantial growth from 2019 to 2021. Revenues increased from about 2.34 billion US dollars in 2019 to a peak of nearly 3.71 billion in 2021. Following this peak, revenues declined considerably, decreasing to approximately 3.15 billion in 2022, and further dropping to about 2.62 billion in 2023. This pattern indicates a significant contraction in revenue after 2021.
- MVA margin
- The MVA margin, expressed as a percentage, displayed notable volatility during the period. It started at 388.67% in 2019, peaked at 665.41% in 2020, then experienced a sharp decline to 427.19% in 2021 and a slight decrease to 419.68% in 2022. Contrary to the preceding downward trend, the margin improved substantially in 2023, rising to 502.89%. This suggests improved efficiency or value generation relative to revenues in the latest year despite declining revenues.
- General insights
- The data reflects a period of growth between 2019 and 2020, followed by a peak in revenues and MVA in 2021, and then a notable decline in revenues accompanied by a decrease in MVA over the subsequent two years. Despite lower revenues in the final years, the increase in MVA margin in 2023 indicates a possible strategic focus on value creation or cost efficiency that helped sustain market value relative to revenues. Overall, the company experienced considerable volatility in its financial performance metrics, with an initial expansion phase followed by contraction and partial recovery in value margins.