Measure total shareholder wealth created above the capital invested in a company.
Market Value Added (MVA)—
Total Market Value—
MVA as % of Capital—
Assessment—
Formula:
MVA = (Market Value of Equity + Market Value of Debt) − Total Capital Invested
What is Market Value Added?
Market Value Added (MVA) measures the difference between a company's current market value and the total capital contributed by investors (both equity and debt). A positive MVA means the company has created wealth for its stakeholders beyond the capital invested.
Why MVA Matters
Positive MVA — Company has created shareholder value above invested capital
Negative MVA — Company has destroyed value; market values it below what was put in
Performance benchmark — Compares management's value creation across companies