Formula
NCAV = Current Assets - Total Liabilities
Workflow
1
Subtract total liabilities from current assets.
2
Divide NCAV by shares outstanding to estimate value per share.
3
Check cash quality, debt maturity, and operating losses before acting.
Best Used For
- Asset-heavy companies trading below a conservative liquidation proxy.
- Deep value screening where downside protection is the main question.
Limitations
- Low NCAV multiples can reflect real business distress.
- Inventory and receivables may not convert to cash at book value.