What Is Net Asset Value Per Share?

The net asset value per share reflects the net asset value of the company represented by each share, and is an important basis for supporting the stock market price. The larger the net asset value per share, the stronger the wealth represented by each company's stock, and generally the stronger the ability to create profits and the ability to resist external influences.

Net asset value per share

The net asset value per share reflects the net asset value of the company represented by each share, and is an important basis for supporting the stock market price. The larger the net asset value per share, the stronger the wealth represented by each company's stock, and generally the stronger the ability to create profits and the ability to resist external influences.

Chinese name

Net asset value per share

Reflection

Value of the company's net assets per share

Support

An important basis for stock market prices

Explanation

On behalf of the company's own property

Return on net assets after-tax profit per share is also called earnings per share, which can be calculated by dividing the company's profit after tax by the total number of shares in the company. ^[1]

For example, a listed company's profit after tax for the year was 200 million yuan, and the company's total number of shares was 1 billion shares. Then, the company's after-tax profit per share was 0, 2 yuan (ie 200 million yuan divided by 1 billion shares). The after-tax profit per share is outstandingly distributed to each share of profit, which is the basis for pricing the stock market at the price-earnings ratio. If a company's total after-tax profit is large, but its earnings per share are small, it indicates that its operating performance is not satisfactory, and the price per share is usually not high; otherwise, a high earnings per share indicates that the company's operating performance is good, Can often support higher stock prices. The company's net assets represent the property owned by the company itself, as well as the shareholders' rights and interests in the company, so it is also called shareholder equity. In accounting calculation, it is equivalent to the balance of total assets in the balance sheet minus all debts. Divide the company's net assets by the total number of shares issued to get the net assets per share. ^[1]

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The company's net assets represent the company's own property, as well as the shareholders' rights and interests in the company. Therefore, it is also called

The company's net assets represent the company's own property, as well as the shareholders' rights and interests in the company. Therefore, it is also called shareholder equity. In accounting calculation, it is equivalent to the balance of the total assets in the balance sheet minus all the debts. Divide the company's net assets by the total number of shares issued to get the net assets per share. For example, the above company's net assets are 1.5 billion yuan, and its

Investment theory tells us the value of an enterprise is its long-term profitability and long-term cash returns. Here we see that the value of stocks in the theory of enterprise value is mainly determined by the long-term profitability of the company and the amount of long-term returns. Obviously long-term The profitability and long-term income are not closely related to the size of the net assets, but only to a certain extent. A company with long-term long-term cash return capabilities must have certain net assets, but a company with many net assets does not necessarily have good long-term profitability. So long-term profitability is the key when choosing stocks, and net assets are not very important. The stock prices of Coca-Cola and Baidu are not even related to net assets. The president of Coca-Cola once said, 'You burn all my delivery rooms and equipment, and we will resume normal production and operation soon.' ^[2]