What is NCAV?
A conservative measure of liquidation value: current assets minus ALL liabilities, divided by shares outstanding.
Think of it like this
Like calculating what you could sell quickly (cash, inventory) minus everything you owe - the 'fire sale' value per share.
Formula
NCAV = (Current Assets - Total Liabilities) ÷ Shares Outstanding- Current Assets: Cash, receivables, inventory
- Total Liabilities: All short and long-term debt
- Per Share: Divided by shares outstanding
Why it matters
- Benjamin Graham's deep value metric
- Stocks trading below NCAV are 'net-nets'
- Provides margin of safety
- Ignores fixed assets entirely
What's a good value?
Stock < NCAV
Deep Value
Trading below liquidation value
Stock < 2× NCAV
Value
Potential value opportunity
Stock > 2× NCAV
Normal
No margin of safety from NCAV
Negative NCAV
N/A
Liabilities exceed current assets
Real-world example
A stock at $10 with NCAV of $12 is a 'net-net' - you're paying less than liquidation value.
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