NCAV Calculator

The formulas behind the calculator

Net current asset value is Benjamin Graham's rough estimate of what is left for shareholders if a company turns its current assets into cash and settles everything it owes. Only current assets count; property, plant, equipment and goodwill are ignored.

Net-net working capital (NNWC) is the stricter version. It keeps the liquidation haircuts Graham and Dodd used, so inventory and receivables count for less than book value:

Enter every money figure and the share count in the same unit. Millions are the easiest choice because that is how most balance sheets are reported, and the per-share results come out in the real currency either way.

How to read the results

• P/NCAV below 1.0 means the market values the whole company at less than its net current assets. That is the definition of a net-net stock.
• P/NCAV at or below 0.67 clears Graham's two-thirds rule: he wanted an extra margin of safety because liquidation rarely recovers book value. That threshold is the "Graham buy price" the calculator shows.
• Margin vs the Graham buy price is how far the price sits below (or above) that cutoff, as a percentage. A positive number means there is room left.
• Negative NCAV means liabilities and preferred stock already exceed current assets. There is no liquidation cushion, so the stock is not a net-net at any price and the ratios stay blank.
• NNWC below the price while NCAV is above it tells you the case depends on inventory and receivables holding their value.

Worked example

The calculator opens with the hypothetical company used in our guides, in $ millions: $125M of current assets ($40M cash, $30M receivables, $50M inventory, $5M other), $60M of total liabilities, no preferred stock, 10M diluted shares and a $4 share price.

1. NCAV = $125M − $60M − $0 = $65M
2. NCAV per share = $65M ÷ 10M = $6.50
3. P/NCAV = $4.00 ÷ $6.50 ≈ 0.62
4. Graham buy price = 2/3 × $6.50 ≈ $4.33, so $4.00 is about 7.7% below it
5. NNWC = $40M + (0.75 × $30M) + (0.5 × $50M) − $60M = $27.5M, or $2.75 per share

So the stock is a net-net and clears the two-thirds rule, but it trades above NNWC per share: pay $4.00 and you are relying on the inventory being worth more than a fire-sale price. The NCAV vs net-net working capital guide works through when that distinction decides the case.

Common mistakes

• Using total assets. NCAV starts from current assets only. Dropping in total assets turns almost every company into a "net-net".
• Subtracting only current liabilities. Every liability comes off, including long-term debt, leases and pension obligations.
• Forgetting preferred stock and minority interest. Both rank ahead of common shareholders. Preferred stock has its own field here; our screener also subtracts minority interest.
• Ignoring off-balance-sheet claims. Operating lease commitments, litigation, guarantees and buyback obligations do not appear in the liabilities line, and they can wipe out a thin cushion.
• Using a stale balance sheet. A loss-making company burns through its current assets between filings, so pair the latest report with the share count from the most recent cover page, not a year-old one.
• Mixing currencies or units. A balance sheet reported in thousands of yen next to a share price in dollars produces a number that looks like a bargain and is not. Convert first, then calculate.
• Using basic instead of diluted shares. Options, warrants and convertibles dilute the per-share figure you are buying.

Where to go next

For the background on the formula, read what net current asset value is, then what a net-net stock is for how Graham used it. Our methodology page documents the exact formula, exclusions and update schedule behind the screener.