Definition
Net Current Asset Value (NCAV) is Benjamin Graham's most conservative valuation metric. It estimates what shareholders would receive if the company were liquidated today — selling all current assets and paying off every liability, while assuming all long-term assets (property, equipment, intangibles) are worth zero.
Formula
NCAV per Share = (Current Assets − Total Liabilities) ÷ Shares Outstanding
Current Assets = Cash, receivables, inventory — assets convertible to cash within a year
Total Liabilities = All obligations — current and long-term (not just current liabilities)
Shares Outstanding = Total shares issued
Graham recommended buying only when the stock price is below ⅔ of NCAV per share — providing a margin of safety even on this already-conservative measure.
Worked example
Worked example
Current Assets$500M
Total Liabilities$300M
NCAV = $500M − $300M$200M
Shares Outstanding100M
NCAV per Share$2.00
Graham's buy threshold (⅔ × $2.00)$1.33
If the stock trades at $1.20, it's below Graham's ⅔ threshold — meaning the market values the entire business at less than its conservative liquidation value. These "net-net" situations are rare in modern markets but remain a cornerstone of deep-value investing.