Net Current Asset Value (NCAV)

Net current asset value is current assets minus total liabilities — what would be left for shareholders if a company's factories, patents, and goodwill were all worth zero and only the cash, receivables, and inventory counted. Benjamin Graham's "net-net" strategy bought stocks below two-thirds of NCAV per share, a discount so deep the liquidation value alone covered the purchase.

Note the asymmetry in the formula: ALL liabilities are subtracted, including long-term debt, but only CURRENT assets count. That makes NCAV far stricter than book value or even tangible book value, which credit fixed assets too.

True net-nets are nearly extinct in large-cap US markets — screens today surface mostly micro-caps, Japanese small companies, and businesses burning cash fast enough that the asset cushion is shrinking every quarter. That last group is the classic net-net trap: the discount is real but the assets are evaporating.