What does positive MVA indicate?

The market believes the company will generate positive EVA into the future. A company with $500M invested capital and $2B EV has MVA of $1.5B.

How does MVA relate to P/B ratio?

MVA/Invested Capital = P/B - 1. A P/B of 3.0x means MVA equals twice invested capital. Companies consistently generating ROIC above WACC command P/B ratios above 1.0.

Yes. When EV is less than invested capital, the market expects continued value destruction. Common in industries with structural decline or persistent ROIC below WACC.

Market Value Added (MVA) Calculator

Calculate MVA: Enterprise Value - Invested Capital. Represents wealth created above and beyond the capital invested. The present value of all future expected EVAs.

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Market Value Added (MVA) Calculator

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Frequently Asked Questions

What does positive MVA indicate?

How does MVA relate to P/B ratio?

Can MVA be negative?