What is the net asset value?
In financial statement, the assets are anything owned by a person, a company or other entity with a monetary value and can be transferred to cash. The obligations are any debts or claims that a person or organization must legally pay. The net value of assets (NAV) is the remaining value when the obligations are deducted from the assets. If the value is positive, the party is considered a solvent; If the value is negative, then the party is considered insolvent. The formula for finding is:
(market value of securities owned by + cash funds and other assets - a total of all funds of the fund) / number of outstanding shares.
This counts at the end of business every day and is referred to as the net value of assets per share. The mutual fund can change daily due to market fluctuations that affect the fund's investment.
Calculation of corporation obligations can be slightly more complicated than for individuals. In addition to loans, mortgages and operating debt, the company fromAhorn any deferred dividends of shares and unpaid taxes that will be payable within one year. Pare tax, unemployment tax, real estate tax and personal real estate tax should be considered.
The net value of the company's assets, also known as the accounting value or the value of the shareholder, does not necessarily correspond to the viable selling price. VAV considers only tangible assets, not intangible, such as Goodwill, which helps to determine its future earnings potential. If the company has a patent that promises to significantly increase revenue, this would justify the selling price that is higher than the accounting value. Conversely, if the market demand for the company's product line is decreasing, then the company would probably be sold for less than its NAV.
Calculation calculations are also important for non -profit organization. Although charity organizations do not exist to make profits, it is necessaryItalial value of net asset if the organization plans to grow. Foundations and other big donors often review the balance sheets and budgets of charity organizations before doing any grants or gifts. They do this to see if the organization will remain a solvent and will be able to fulfill its charity purpose.
While the net value of assets usually does not apply to real estate rental, many analysts use many analysts to evaluate shares in real estate investment (REIT). These are public companies that sell ordinary shares to investors. Their primary store is the purchase and management of real estate producing incomes such as hotels, apartment buildings, shopping centers and office complexes. The profits are distributed to owners of dividends. In order to determine a more accurate evaluation, use calculations for NAV Reit the current market value of the properties instead of this depreciated depreciated.
When you find your net asset value you should consider all yourassets. This includes cash, pension savings, the value of life insurance redemption, the current value of shares or bonds, and the real market value of all personal and real estate. Liabilities include any mortgages, debts or legal claims for which it is responsible. Since this formula does not take into account its income and the ability to pay debt, the negative value of a net asset is not a sign that it should announce the inability. However, this is an essential measure for financial planning purposes.