Market Value Added (MVA)

posted in: Analytics, Finance & Accounting, Financials | 0

How is MVA calculated?

The MVA formula:

MVA = Market Value - Capital Value

What is the relationship between MVA and Economic Value Added (EVA)?

Market value added is the present value of any future EVAs.

Business Management Software


Rated #1 Excel Dashboards, Scorecards and KPIs Reports

Financial Analysis and Reporting Templates



How is EVA calculated?

EVA formula:
EVA = after tax net operating profit - weighted average cost of capital (WACC) x capital

MVA is the same as calculating net present value of after tax earnings when WACC is utilized for the purpose of discounting.

The greater the market value added the better – this means that the company generates high value for its stakeholders. When MVA is a negative value, this means that the company creates market value which is less than the value of the capital invested.

On the other hand, EVA calculates the company’s value beyond the required return on investments. In simple terms, the value added should exceed the cost of capital employed.

Rated #1 Excel Dashboards, Scorecards and KPIs Reports

Here is How to Easily Track your KPIs in Excel

Financial Ratios, Metrics and KPIs Templates