Price to net current asset value (Price/NCAV)
The share price over net current asset value per share: current assets minus every liability, with no deduction for preferred stock.
Graham's net-net comparison as one number. Below 1.0 the shares cost less than the current assets left after paying every liability.
How it is computed here
Share price / ((current assets - total liabilities) / weighted-average diluted shares of the latest fiscal year)
Today's market price against the latest available fundamentals. Combines today's market price with the most recently filed fundamentals. It moves whenever the price moves, with nothing having changed in the business. Filed under value. Neither a high nor a low reading is good on its own, so it is never coloured as one.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- Graham also deducted preferred stock. This does not, so a company with preferred shares reads cheaper here than on his test.
- Shares issued since the fiscal year are not counted, so a company that raised equity since reads cheaper than it is.
- Withheld when net current asset value is zero or negative, when either balance-sheet line is not filed, or when the share count no longer matches the quote.
- Assumes current assets turn into cash at book value. In a failing business they usually do not.
Not meaningful for banks, insurers, REITs: the product prints n/m with the reason rather than a number for them.
Questions
How is price to net current asset value calculated?
Share price / ((current assets - total liabilities) / weighted-average diluted shares of the latest fiscal year). Today's market price against the latest available fundamentals. Combines today's market price with the most recently filed fundamentals. It moves whenever the price moves, with nothing having changed in the business.
What does price to net current asset value tell a value investor?
Graham's net-net comparison as one number. Below 1.0 the shares cost less than the current assets left after paying every liability.
When does price to net current asset value mislead?
Graham also deducted preferred stock. This does not, so a company with preferred shares reads cheaper here than on his test. Shares issued since the fiscal year are not counted, so a company that raised equity since reads cheaper than it is. Withheld when net current asset value is zero or negative, when either balance-sheet line is not filed, or when the share count no longer matches the quote. Assumes current assets turn into cash at book value. In a failing business they usually do not.