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
- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Revenues
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MVA
GE Aerospace, MVA calculation
US$ in millions
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 »
- Market (fair) value of GE Aerospace
- From December 31, 2020 to December 31, 2024, the market value experienced a fluctuating trend. Initially, the value declined from 193,519 million USD in 2020 to 123,573 million USD in 2022, reflecting a significant downward movement over two years. Following this period, a recovery is observed, with the market value increasing to 172,464 million USD in 2023 and further rising to 239,201 million USD in 2024. Overall, despite the mid-term dip, the market value shows a strong rebound and growth by the end of the analyzed period.
- Invested capital
- Invested capital showed a consistent decline throughout the entire timeframe from 117,528 million USD in 2020 to 37,678 million USD in 2024. This represents a substantial reduction of nearly 68% over the five-year period. The most notable drops occurred between 2020 and 2021, and continued steadily downward in subsequent years, indicating a significant scaling down of invested assets or capacity.
- Market value added (MVA)
- The MVA remained relatively stable during the early years, with values around 75,991 million USD in 2020 and 79,784 million USD in 2021, followed by a decline to 56,731 million USD in 2022. However, from 2022 onwards, a marked and rapid increase occurred, with MVA more than doubling to 122,270 million USD in 2023 and further escalating to 201,523 million USD in 2024. This suggests enhanced shareholder value creation or improvements in market perception relative to the invested capital during the latter years.
- Summary of trends
- Overall, the data reflects a strategic reduction in invested capital accompanied by heightened market valuation and value creation from 2022 to 2024. The decline in invested capital may be indicative of asset optimization or divestiture initiatives. Meanwhile, the rebound and growth in market value along with the substantial increase in MVA suggest greater market confidence and value generation efficiency despite lower invested capital. This divergence points toward improved returns on invested capital and possibly stronger operational performance or market positioning in the recent years.
MVA Spread Ratio
GE Aerospace, 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 millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
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.
- Market Value Added (MVA)
- The market value added demonstrates a fluctuating but overall increasing trend over the analyzed period. It initially increases from 75,991 million US dollars in 2020 to 79,784 million in 2021, followed by a decline to 56,731 million in 2022. After 2022, a significant upward surge is observed, reaching 122,270 million in 2023 and further rising sharply to 201,523 million in 2024. This pattern suggests periods of both contraction and substantial growth in the company's market value added.
- Invested Capital
- Invested capital shows a consistent downward trend across the years. Starting at 117,528 million US dollars in 2020, it decreases progressively each year, falling to 72,026 million in 2021, 66,842 million in 2022, 50,194 million in 2023, and finally to 37,678 million in 2024. This reduction indicates a continual decrease in the amount of capital invested in the business, which might reflect divestments, asset optimization, or other capital efficiency measures.
- MVA Spread Ratio
- The MVA spread ratio indicates the profitability spread relative to invested capital and exhibits significant growth. The ratio increases from 64.66% in 2020 to 110.77% in 2021, declines to 84.87% in 2022, but then climbs sharply to 243.6% in 2023 and further accelerates to 534.86% in 2024. This trend points to improving value generation over invested capital, particularly notable in the most recent years, suggesting enhanced operational efficiency or increased returns driving market value above the capital base.
MVA Margin
GE Aerospace, 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 millions) | ||||||
| Market value added (MVA)1 | ||||||
| Sales of equipment and services | ||||||
| Add: Increase (decrease) in deferred income | ||||||
| Adjusted sales of equipment and services | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
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 sales of equipment and services
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added exhibited fluctuations over the examined period. Initially, there was a moderate increase from approximately 75,991 million US dollars at the end of 2020 to 79,784 million US dollars at the end of 2021. Subsequently, a noticeable decline occurred in 2022, with MVA decreasing to 56,731 million US dollars. This trend reversed significantly in the following years, with a robust increase to 122,270 million US dollars in 2023, followed by a substantial surge to 201,523 million US dollars by the end of 2024, suggesting a strong recovery and growth in market valuation.
- Adjusted Sales of Equipment and Services
- Adjusted sales demonstrated a declining trajectory across the analyzed timeframe. Starting from 73,538 million US dollars in 2020, there was a slight reduction to 71,356 million US dollars in 2021. Sales showed a minor rebound in 2022, increasing to 73,736 million US dollars. However, the subsequent years revealed a pronounced downturn, with sales dropping sharply to 64,504 million US dollars in 2023 and then plunging further to 35,098 million US dollars by 2024. This downward pattern may indicate challenges in sales performance or changes in business operations impacting revenue.
- MVA Margin (%)
- The margin ratio displayed considerable volatility during the period under review. Starting at 103.34% in 2020, it increased to 111.81% in 2021, aligning with the initial growth in market value added. A significant decline occurred in 2022, with the margin falling to 76.94%, reflecting the dip in market valuation relative to sales. Following this, the margin escalated dramatically, reaching 189.55% in 2023 and skyrocketing to an exceptionally high level of 574.17% by 2024. This sharp increase indicates that market value added grew disproportionately compared to adjusted sales, signaling potentially improved market perception or valuation multiples independent of sales trends.