1. What is Net Asset Value?

Net Asset Value (NAV) represents the per-share value of a fund or company, calculated by subtracting total liabilities from total assets and dividing by the number of shares outstanding. It's a key metric for evaluating the value of investment funds.

2. How Does the Calculator Work?

The calculator uses the NAV formula:

Where:

• \( A \) — Total assets (dollars)
• \( L \) — Total liabilities (dollars)
• \( S \) — Number of shares outstanding

Explanation: The formula calculates the net value of all assets after accounting for liabilities, then divides this value equally among all outstanding shares.

3. Importance of NAV Calculation

Details: NAV is crucial for investors to assess the value of their investments in mutual funds, ETFs, and other pooled investment vehicles. It helps determine the fair price for buying or selling fund shares.

4. Using the Calculator

Tips: Enter total assets and liabilities in dollars, and the number of shares outstanding. All values must be valid (assets ≥ 0, liabilities ≥ 0, shares > 0).

5. Frequently Asked Questions (FAQ)

Q1: How often is NAV calculated for investment funds?
A: Most mutual funds and ETFs calculate NAV at the end of each trading day, based on closing market prices.

Q2: What's the difference between NAV and market price?
A: NAV represents the intrinsic value per share, while market price is what investors are willing to pay. For closed-end funds, these can differ significantly.

Q3: Does NAV include all assets and liabilities?
A: Yes, NAV calculations should include all assets (cash, securities, receivables) and all liabilities (debts, payables, expenses).

Q4: How does NAV affect investment decisions?
A: Investors often compare NAV to market price to identify potential undervalued or overvalued opportunities.

Q5: Can NAV be negative?
A: Yes, if liabilities exceed assets, NAV becomes negative, indicating financial distress.