Should be or should we not deduct long term debt along with current liabilities from total current assets to arrive at current asset value per share?


Net Current Asset Value Per Share - NCAVPS:

A value created by professor Benjamin Graham in the mid-twentieth century to determine if a company was trading at a fair market price. NCAVPS is calculated by taking a company's current assets and subtracting the total liabilities, and then dividing the result by the total number of shares outstanding. (Investopedia)


(Current Assets- Total Liabilities)/Number of shares outstanding

For example:

XYZ company has $16 million in current assets , $6 million in current liabilities, and 2 million shares outstanding. So according to the formula we have:

NCAVPS = ($16,000,000 - $6,000,000) / 2,000,000 = $5

  • 1
    Thank you, I was trying to apply Benjamin Grahams definition in security analysis to some company's balance sheet report from S&P. I ran into this difficulty of finding both Current Liability and Long Term Debt. I wasn't sure if NVCAPS is less long term debt. – Ace Sep 10 '15 at 16:39
  • - note that his (Benjamin Graham) formula for NCAVPS uses total liabilities rather than current liabilities, and typically results in a smaller number. - investinganswers.com The reason some use it (long term debt) and some don't is LTD used properly is great for a company (leverage). However, too much LTD can cause a company to default on the payments. It is better to find a way to find a medium between the two equations - one that uses the upcoming debt payments - to get a good analysis. – Ross Sep 11 '15 at 12:50

NCAVPS: (Current Assets- Total Liabilities) / Shares Outstanding


Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.