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
Cummins Inc., MVA calculation
US$ in millions
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 »
| Item | Description | The company |
|---|---|---|
| MVA | Cummins Inc. market (fair) value less invested capital. | Cummins Inc. MVA increased from 2021 to 2022 and from 2022 to 2023. |
MVA Spread Ratio
Cummins 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 millions) | ||||||
| Market value added (MVA)1 | 23,047) | 21,140) | 19,563) | 24,297) | 13,278) | |
| Invested capital2 | 20,768) | 22,657) | 17,518) | 17,479) | 15,235) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 110.97% | 93.30% | 111.67% | 139.01% | 87.16% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Boeing Co. | 297.77% | 250.89% | 256.38% | 257.78% | 489.80% | |
| Caterpillar Inc. | 238.67% | 194.12% | 164.79% | 176.94% | 108.09% | |
| Eaton Corp. plc | 289.43% | 149.39% | 132.30% | 124.83% | 66.62% | |
| GE Aerospace | 243.60% | 84.87% | 110.77% | 64.66% | 58.28% | |
| Honeywell International Inc. | 211.09% | 224.23% | 209.78% | 236.48% | 239.06% | |
| Lockheed Martin Corp. | 352.46% | 399.68% | 319.28% | 284.59% | 441.62% | |
| RTX Corp. | 48.99% | 54.30% | 57.80% | 31.41% | 82.79% | |
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 × 23,047 ÷ 20,768 = 110.97%
4 Click competitor name to see calculations.
| Performance ratio | Description | The company |
|---|---|---|
| MVA spread ratio | The ratio of MVA to invested capital. It measures the efficiency with which investors’ capital investment has translated into a franchise value and into an aggregate net present value premium. | Cummins Inc. MVA spread ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level. |
MVA Margin
Cummins 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 millions) | ||||||
| Market value added (MVA)1 | 23,047) | 21,140) | 19,563) | 24,297) | 13,278) | |
| Net sales | 34,065) | 28,074) | 24,021) | 19,811) | 23,571) | |
| Add: Increase (decrease) in deferred revenue | 338) | 143) | 174) | 177) | 198) | |
| Adjusted net sales | 34,403) | 28,217) | 24,195) | 19,988) | 23,769) | |
| Performance Ratio | ||||||
| MVA margin2 | 66.99% | 74.92% | 80.85% | 121.56% | 55.86% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Boeing Co. | 171.80% | 191.47% | 203.39% | 211.11% | 227.39% | |
| Caterpillar Inc. | 214.72% | 188.17% | 190.18% | 245.71% | 116.96% | |
| Eaton Corp. plc | 392.00% | 221.57% | 198.58% | 191.64% | 91.84% | |
| GE Aerospace | 189.55% | 76.94% | 111.81% | 103.34% | 86.63% | |
| Honeywell International Inc. | 278.88% | 295.90% | 293.22% | 350.74% | 278.15% | |
| Lockheed Martin Corp. | 143.06% | 161.14% | 136.30% | 122.08% | 189.58% | |
| RTX Corp. | 79.64% | 91.75% | 102.95% | 64.17% | 111.10% | |
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 net sales
= 100 × 23,047 ÷ 34,403 = 66.99%
3 Click competitor name to see calculations.
| Performance ratio | Description | The company |
|---|---|---|
| MVA margin | The ratio of MVA to sales. It measures how efficiently and prodigiously sales translate into franchise value. | Cummins Inc. MVA margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023. |