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.
Paying user area
Try for free
Illinois Tool Works Inc. pages available for free this week:
- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Total Asset Turnover since 2005
- Analysis of Revenues
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Illinois Tool Works Inc. for $22.49.
This is a one-time payment. There is no automatic renewal.
We accept:
MVA
Illinois Tool Works Inc., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value of ITW
- The market value experienced a decline from 64,984 million USD in 2017 to 55,189 million USD in 2018, representing a notable decrease during this period. Subsequently, the market value rebounded substantially, increasing to 68,699 million USD in 2019 and continuing its upward trend to 73,244 million USD in 2020. This positive progression persisted into 2021, reaching 76,831 million USD. Overall, after the initial downturn, the market value demonstrated sustained growth over the latter years.
- Invested capital
- Invested capital showed a modest decrease from 14,406 million USD in 2017 to 12,895 million USD in 2018. From 2018 onwards, invested capital exhibited a gradual recovery, rising to 13,033 million USD in 2019, and continuing to increase to 13,434 million USD in 2020 and 13,555 million USD in 2021. The fluctuation was relatively limited in magnitude compared to the market value, indicating relatively stable capital investment levels over the period.
- Market value added (MVA)
- Market value added mirrored the trajectory of market value, with a decrease from 50,578 million USD in 2017 to 42,295 million USD in 2018. This decline suggested a reduction in value creation. Thereafter, MVA increased significantly in each subsequent year, reaching 55,666 million USD in 2019, 59,810 million USD in 2020, and 63,276 million USD in 2021. This upward trend indicates improved value generation relative to the invested capital base during these years.
MVA Spread Ratio
Illinois Tool Works Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| 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 | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2021 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added exhibits a fluctuating but generally upward trend from 2017 to 2021. It decreased from approximately $50.6 billion in 2017 to around $42.3 billion in 2018, indicating a decline during that period. However, it subsequently increased steadily each year, reaching about $63.3 billion by the end of 2021. This pattern suggests a recovery after 2018 and continued value creation for shareholders in the following years.
- Invested Capital
- Invested capital shows a slight decline from $14.4 billion in 2017 to $12.9 billion in 2018. After this decrease, the invested capital remains relatively stable with modest increases, reaching roughly $13.6 billion by 2021. This implies that while the company reduced its invested capital in 2018, it then maintained a steady level of invested resources in subsequent years without significant expansion.
- MVA Spread Ratio
- The MVA spread ratio, expressed as a percentage, decreased from 351.08% in 2017 to 327.99% in 2018, mirroring the decline in market value added during the same period. Following 2018, the ratio rose substantially each year, peaking at approximately 466.81% in 2021. This increase indicates improving efficiency or profitability in generating market value relative to the invested capital over time.
- Overall Insights
- The data suggests a temporary downturn in market value and efficiency metrics in 2018, likely reflecting challenging conditions or company-specific issues during that year. After 2018, the company demonstrated a strong recovery and consistent growth in market value added, alongside stable invested capital levels. The rising MVA spread ratio over the years points to enhanced performance in leveraging invested capital to create shareholder value. This trend conveys effective capital utilization and increased market confidence between 2019 and 2021.
MVA Margin
Illinois Tool Works Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Operating revenue | ||||||
| Add: Increase (decrease) in deferred revenue and customer deposits | ||||||
| Adjusted operating revenue | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 MVA. See details »
2 2021 Calculation
MVA margin = 100 × MVA ÷ Adjusted operating revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added experienced fluctuations over the five-year period. It started at 50,578 million USD in 2017, decreased to 42,295 million USD in 2018, then increased significantly to 55,666 million USD in 2019. The upward trend continued with further increases to 59,810 million USD in 2020 and 63,276 million USD in 2021. This indicates an overall positive trend in market value creation after an initial dip in 2018.
- Adjusted Operating Revenue
- The adjusted operating revenue presented a variable trend. Revenue increased modestly from 14,339 million USD in 2017 to 14,778 million USD in 2018. It then declined to 14,082 million USD in 2019 and decreased further to 12,608 million USD in 2020, reflecting potential operational challenges or market conditions affecting sales or pricing. In 2021, revenue rebounded to 14,627 million USD, nearly returning to the initial levels observed in 2017 and 2018.
- MVA Margin
- The MVA margin, which measures market value added as a percentage of revenue, showed notable variability and an overall increasing trend. Starting at 352.73% in 2017, it dropped to 286.2% in 2018, reflecting lower efficiency in value creation relative to revenue during that year. Subsequently, the margin rose sharply to 395.3% in 2019, peaked at 474.38% in 2020, and then slightly declined to 432.6% in 2021. This pattern suggests improved value creation efficiency, especially through the 2019-2021 period, despite the dip in revenue experienced in 2020.