Free Net-Net (NCAV) Calculator
Calculate net current asset value (NCAV) per share and Graham's two-thirds net-net buy threshold, and see whether a stock qualifies as a net-net.
Net-net buy threshold (two-thirds of NCAV): $4.67
At $4.00, this qualifies as a Graham net-net: the price sits below two-thirds of liquidation-style asset value.
What a net-net is
A net-net is Benjamin Graham's deepest form of asset bargain: a stock trading below its net current asset value. NCAV is current assets minus all liabilities, a conservative stand-in for what shareholders might recover if the business were wound up. Buy below that level and you are paying less than the company's liquid assets net of every obligation, with the operating business and any fixed assets thrown in for nothing.
How the calculation works
- Take total current assets and subtract total liabilities, all of them, not just current liabilities.
- Divide by shares outstanding to get net current asset value per share.
- Compare the price to two-thirds of NCAV per share. At or below that threshold, the stock qualifies as a Graham net-net.
Why two-thirds
The two-thirds threshold is a margin of safety on top of an already conservative figure. Receivables and inventory rarely fetch full book value in a forced sale, so paying no more than two-thirds of NCAV leaves room for those assets to disappoint and still protects the buyer. It is a discount applied to a number that is itself a discount to going-concern value.
Assumptions and limits
Net-nets are rare in large, well-followed markets and tend to surface in small caps, in broad sell-offs, or in overlooked corners. They usually come with real problems, which is why the traditional approach is to buy a diversified basket rather than concentrate, and to check that the assets and liabilities are what they appear to be. A business that is burning cash can erode its NCAV quickly, so the asset floor is a starting point, not a guarantee.
Related calculators
- Earnings power value calculator — value the business on its earnings rather than its assets, as a second lens.
- Margin of safety calculator — measure the discount of price to value once you have an estimate.
Frequently asked questions
- What is a net-net stock?
- A net-net is a stock trading below its net current asset value, a deep-value idea from Benjamin Graham. Net current asset value (NCAV) is current assets minus all liabilities, a conservative estimate of what shareholders might recover in a liquidation. Buying below this level means paying less than the business's liquid assets net of every obligation.
- How is NCAV calculated?
- Take total current assets and subtract total liabilities (all of them, not just current liabilities), then divide by shares outstanding to get NCAV per share. Graham's rule of thumb was to buy only when the price was at or below two-thirds of NCAV per share, which builds in a margin of safety against asset values that prove optimistic.
- Why two-thirds of NCAV?
- The two-thirds threshold is a margin of safety. Current assets such as receivables and inventory rarely fetch their full book value in a forced sale, so paying no more than two-thirds of NCAV leaves room for those assets to disappoint and still leaves the buyer protected. It is a discount on top of an already conservative figure.
- Do net-nets still exist?
- They are rare in large, well-followed markets and tend to appear in small caps, during broad sell-offs, or in overlooked corners of the market. When they do appear, they often come with real problems, so the discipline is to buy a basket rather than concentrate, and to check that the assets and liabilities are what they appear to be.
This calculator is for education and research only. It is not investment advice and it does not recommend buying or selling any security. The output depends entirely on the assumptions you enter.