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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?

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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)

Formula:

(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

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    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, 2015 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, 2015 at 12:50
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NCAVPS: (Current Assets- Total Liabilities) / Shares Outstanding

Source

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