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Market Value Added (MVA) is the difference between the current market value of a firm and the capital contributed by investors. If MVA is positive, the firm has added value. If it is negative, the firm has destroyed value. The amount of value added needs to be greater than the firm's investors could have achieved investing in the market portfolio, adjusted for the leverage (beta coefficient) of the firm relative to the market.

Basic formula[edit]

The formula for MVA is:

 MVA = V - K  \,

where:

  • MVA is market value added
  • V is the market value of the firm, including the value of the firm's equity and debt
  • K is the capital invested in the firm

MVA is the present value of a series of EVA values. MVA is economically equivalent to the traditional NPV measure of worth for evaluating an after-tax cash flow profile of a project if the cost of capital is used for discounting.

References[edit]

  • G. Bennett Stewart III, The Quest for Value (HarperCollins, 1991).

Original courtesy of Wikipedia: http://en.wikipedia.org/wiki/Market_value_added — Please support Wikipedia.
This page uses Creative Commons Licensed content from Wikipedia. A portion of the proceeds from advertising on Digplanet goes to supporting Wikipedia.

6 news items

 
SYS-CON Media (press release)
Thu, 28 Aug 2014 03:30:00 -0700

Companies active in the mobile VAS market (value added services) and discussed in this report include America Movil, Apple, AT&T, BlackBerry, CanvasM Technology, Comviva Technology, Google, InMobi, KongZhong, OnMobile, One97 Communications, ...
 
Bloomberg
Thu, 18 Sep 2014 17:23:24 -0700

Toyota Motor Corp., the world's biggest carmaker by market value, added 0.8 percent to 6,494 yen. IHI jumped 5.1 percent to 540 yen, its highest close since November 1996. Credit Suisse raised its rating on the stock to outperform from neutral and ...
 
The Globe and Mail
Mon, 15 Sep 2014 16:26:15 -0700

-A market value-added (MVA/MV) ratio that is positive to ensure the invested capital is working properly. (MVA is the total market value minus the capital that was invested in the company.) We evaluate the difference between the market value of the ...

Economic Times

Economic Times
Mon, 15 Sep 2014 15:37:10 -0700

While commodity-based processing holds two-thirds of this market, value-added processing is growing faster, at 10% a year. High growth segments include dairy, health foods, ready-to-cook/eat, organic foods, fruit juices and convenience foods, it said.
 
Jakarta Globe
Wed, 20 Aug 2014 08:03:10 -0700

Gudang Garam, the nation's second-biggest cigarette maker by market value, added 0.9 percent to Rp 55,000. The miscellaneous sector — which groups automotive, textile, heavy equipment and footwear makers — rose 0.6 percent. Astra Internasional ...
 
Shanghai Daily (subscription)
Fri, 22 Aug 2014 04:20:47 -0700

HONG KONG, Aug. 22 (Xinhua) -- Hong Kong stocks ended up 0.47 percent on Friday, with the benchmark Hang Seng index rising 118. 13 points to end at 25,112.23 points, after trading between 25,025. 94 and 25,132.93. Turnover totaled 63.67 billion HK ...
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