Net Asset Value (per share)

Formal

An ‘imaginary’ measure of how much each shareholder would receive if the company terminated its operation, settled all its debts, and ended up with a cash balance available for distribution to shareholders. A comfort factor for investors about the underlying asset strength of a business when considering investment.

Real-world Example

A company has a Net Asset Value of $3M and 1 million shares in issue - a Net Asset Value per share of $3, often compared against the current share price to see if a stock looks cheap or expensive.