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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Lockheed Martin Corp. pages available for free this week:
- Balance Sheet: Assets
- Cash Flow Statement
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Net Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Price to Earnings (P/E) since 2005
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MVA
Lockheed Martin Corp., 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 Lockheed Martin
- The market value shows an overall upward trend from 2020 to 2024, increasing from $107,892 million to $127,192 million. Notably, there was a steady rise from 2020 through 2022, peaking at $132,930 million in 2022. However, a decline is observed in 2023, where the value dropped to $124,097 million, followed by a slight rebound in 2024 to $127,192 million. This indicates some volatility in market perception or external factors influencing market capitalization during the latter period.
- Invested capital
- Invested capital remains relatively stable across the five-year span, fluctuating within a narrow range. It started at $28,054 million in 2020 and slightly decreased to $26,603 million by 2022. Afterwards, it recovered, increasing to $28,784 million by 2024. The variations are minor, suggesting consistent reinvestment or capital management with no significant expansions or contractions in invested capital during this period.
- Market Value Added (MVA)
- MVA exhibits a growth pattern similar to the market value, increasing from $79,838 million in 2020 to a peak of $106,327 million in 2022. A decline follows in 2023, dropping to $96,670 million, and then a modest increase to $98,408 million in 2024. This pattern reflects changes in market value relative to invested capital and aligns with the fluctuations seen in market value, suggesting shifts in investor expectations or company performance impacting economic value added over time.
MVA Spread Ratio
Lockheed Martin Corp., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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 | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| 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 exhibited a general upward trend from 2020 to 2022, increasing from 79,838 million US dollars in 2020 to a peak of 106,327 million US dollars in 2022. However, in the subsequent years, there was a decline, with the MVA dropping to 96,670 million in 2023, followed by a modest recovery to 98,408 million in 2024. This pattern indicates strong growth in market value in the initial years, followed by some volatility and consolidation.
- Invested Capital
- Invested capital showed relative stability over the period with minor fluctuations. It started at 28,054 million US dollars in 2020 and slightly increased to 28,620 million in 2021, then decreased to 26,603 million in 2022. After this dip, invested capital rose again to 27,427 million in 2023 and further to 28,784 million in 2024. This suggests a generally consistent level of invested capital with some adjustments likely reflecting strategic investment decisions or asset management.
- MVA Spread Ratio
- The MVA spread ratio demonstrated a strong upward trend from 284.59% in 2020 to a peak of 399.68% in 2022, indicating an increasing value generated over the invested capital during this period. Following this peak, the ratio decreased to 352.46% in 2023 and further to 341.89% in 2024, reflecting a reduction in the spread but maintaining a high level relative to the start of the period. This trend mirrors the changes in market value added and suggests the company continued to create significant value over its invested capital despite some recent decreases.
- Overall Observations
- The data reveals strong performance with growth in market value added and effective use of invested capital through 2022, followed by some market value correction in the two most recent periods. The invested capital remained relatively stable, implying controlled capital expenditures and possibly a focus on optimizing existing resources. The MVA spread ratio underscores the company's ability to generate substantial returns over invested capital, although it experienced a decline after reaching its peak. These patterns suggest a company that managed growth carefully, experienced market valuation fluctuations, but maintained solid value creation throughout the timeframe.
MVA Margin
Lockheed Martin Corp., 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 | ||||||
| Net sales | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| 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 ÷ Net sales
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added demonstrates a generally upward trend from 2020 to 2024, increasing from $79,838 million in 2020 to $98,408 million in 2024. The peak is observed in 2022 at $106,327 million, followed by a decline in 2023 to $96,670 million, and a slight rebound in 2024. This pattern suggests a period of strong value creation up to 2022, with some volatility occurring thereafter.
- Net Sales
- Net sales figures show relatively stable performance with a moderate increase across the period. Sales moved from $65,398 million in 2020 to $71,043 million in 2024. A slight dip is noted in 2022, where sales decreased to $65,984 million from $67,044 million in 2021, but the overall trend remains positive with sales recovering in subsequent years.
- MVA Margin
- The MVA margin, expressed as a percentage, reflects the efficiency in generating market value relative to sales. It exhibited a growth from 122.08% in 2020 to a peak of 161.14% in 2022. However, this metric declined in the last two years to 138.52% in 2024. This indicates that while the company improved its value creation efficiency through 2022, there was a relative decrease in this efficiency in the following years despite higher net sales.
- Summary
- Overall, the financial data indicates that the company experienced growth in both market value added and net sales over the five-year period. The peak in MVA and MVA margin in 2022 suggests an optimal phase of value creation and operational efficiency. Following this, there was a moderate decline in market value added and MVA margin, while net sales continued a modest upward trajectory. These trends suggest a need to investigate factors behind the volatility in market value added and declining MVA margin post-2022, despite increasing sales.