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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- Cash Flow Statement
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Geographic Areas
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2013
- Price to Operating Profit (P/OP) since 2013
- Aggregate Accruals
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MVA
Hilton Worldwide Holdings 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 »
The analysis of the financial data over the five-year period reveals notable fluctuations and growth trends in key financial metrics.
- Market (fair) value of Hilton
- This value exhibits an overall upward trend with some variability. Starting at US$40,841 million in 2019, it rose slightly to US$43,009 million in 2020 despite global economic challenges likely impacting performance that year. A more significant increase occurred in 2021, reaching US$53,666 million. However, in 2022, a decline to US$49,238 million was observed, before rebounding strongly to US$59,276 million in 2023, achieving the highest value in the period analyzed.
- Invested capital
- The invested capital fluctuated moderately but tended to decrease toward the end of the period. It started at US$11,409 million in 2019 and peaked at US$12,956 million in 2020. Subsequently, it decreased over the following years to US$11,581 million in 2021, US$11,342 million in 2022, and finally to US$10,493 million in 2023. This downward trend in invested capital alongside increasing market value suggests potentially improved capital efficiency or divestiture of assets.
- Market value added (MVA)
- The market value added, representing the difference between market value and invested capital, follows a similar pattern to market value but shows marked growth over time. Beginning at US$29,432 million in 2019, it increased marginally to US$30,053 million in 2020. A substantial rise came in 2021 to US$42,085 million, indicating enhanced shareholder value creation. Though it dipped in 2022 to US$37,896 million, it climbed again in 2023 to US$48,783 million, reaching the highest recorded level in the dataset.
In summary, the data suggests that despite some volatility, particularly in 2020 and 2022, the company has generally increased its market valuation substantially over the five-year span. Concurrently, invested capital has decreased slightly, which combined with the increasing market value, implies the company improved its ability to generate value from its capital base. The patterns observed point toward strengthened market confidence and effective capital management in the later years of the period.
MVA Spread Ratio
Hilton Worldwide Holdings Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
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.
The analysis of the annual financial data reveals notable trends and fluctuations in key financial metrics over the five-year period.
- Market Value Added (MVA)
-
The Market Value Added, expressed in millions of US dollars, showed an overall upward trajectory. Starting at 29,432 million in 2019, it experienced a modest increase in 2020 to 30,053 million. A significant rise occurred in 2021, reaching 42,085 million, followed by a slight decline in 2022 to 37,896 million. The latest figure in 2023 marks a substantial recovery and growth to 48,783 million, representing the highest value reported during the period.
- Invested Capital
-
Invested Capital presented a contrasting trend compared to MVA. Beginning at 11,409 million in 2019, it increased to 12,956 million in 2020 but then steadily declined over the following years. By 2021, the amount dropped to 11,581 million, further decreased to 11,342 million in 2022, and reached its lowest point at 10,493 million in 2023. This indicates a gradual reduction in the capital invested over the period, despite growth in market value added.
- MVA Spread Ratio
-
The MVA spread ratio, expressed as a percentage, reflects the relationship between market value added and invested capital. It started at a high 257.97% in 2019 and slightly decreased to 231.96% in 2020. A pronounced increase was observed in 2021 when the ratio rose to 363.39%, followed by a slight decrease to 334.12% in 2022. In 2023, the ratio reached its peak at 464.91%, illustrating a strengthening spread and indicating enhanced value creation relative to the invested capital.
Overall, the data suggests that despite a reduction in invested capital over the period from 2020 onwards, the company managed to increase its market value added substantially, especially in 2021 and 2023. This resulted in an improving MVA spread ratio, highlighting more efficient use or deployment of capital to generate market value and possibly stronger operational or market performance in the later years. The fluctuations, particularly the dip in MVA in 2022, might require further investigation to understand the underlying causes.
MVA Margin
Hilton Worldwide Holdings 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 | ||||||
| Revenues | ||||||
| Add: Increase (decrease) in deferred revenues | ||||||
| Adjusted revenues | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
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 displayed a fluctuating trend over the analyzed period. Starting at $29,432 million in 2019, it slightly increased to $30,053 million in 2020 despite adverse conditions likely related to the global environment that year. A significant rise was observed in 2021, reaching $42,085 million, indicating substantial value creation. However, the MVA decreased to $37,896 million in 2022 before growing again to the highest level in the period, $48,783 million, in 2023. This suggests a strong recovery and positive investor sentiment towards the company's market value in recent years.
- Adjusted Revenues
- Adjusted revenues experienced major volatility. The revenue sharply declined from $9,435 million in 2019 to $4,522 million in 2020, reflecting a severe impact likely attributable to global economic challenges in that year. Subsequently, revenues gradually recovered to $5,660 million in 2021, followed by a pronounced increase to $8,946 million in 2022. The growth continued into 2023, reaching $10,450 million, surpassing the 2019 level. This trend demonstrates a strong rebound in the company's operational performance and market demand.
- MVA Margin
- The MVA margin, representing market value relative to revenue, exhibited a dramatic increase during 2020 and 2021. It rose from 311.94% in 2019 to a peak of 743.54% in 2021, illustrating that the market valuation grew disproportionately compared to revenue. This could indicate high investor expectations or confidence in future growth prospects despite short-term revenue pressures. The margin then declined to 423.61% in 2022 and moderately rebounded to 466.82% in 2023. Despite the decline from the peak, these levels remain elevated compared to 2019, indicating sustained high valuation multiples.
- Summary Insight
- Overall, the company experienced severe impacts on revenues in 2020, followed by a strong recovery and growth through 2023, exceeding pre-crisis revenue levels. Market value and valuation multiples influenced by external and internal factors showed considerable volatility but ultimately ended at higher levels than before the downturn. The market remains optimistic about the company’s prospects due to the elevated MVA margins and recovering revenue base, highlighting resilience and growth potential despite earlier disruptions.