Net asset value (NAV) cover calculator

Valuing a company according to its net assets doesn't consider possible future earnings. The valuation is merely an estimate of the value of the buildings, stock, and so on which the company owns, less liabilities such as loans, and can be found on the balance sheet.

Taking a simplified view, this is the cash receivable for a business if it were broken up and sold. However, no account is taken of intangible assets, such as the value of brand name, skilled or specialised workforce, goodwill, and so on. Also assets may be understated, being recorded at their historic cost rather than current market value.

Formula
Value of shareholding =	percentage of issued share capital owned  x  net assets
Required Figures: Net assets: £ Percentage of issued share capital owned:   %
Your calculations:		Result:
Value of shareholding =	Net Assets  x  Percentage of issued share capital owned   =	Result

By applying and comparing the result from both methods, it's possible to get a reasonably accurate valuation range.

The valuation of shares is a specialised area and should be carried out by the company's accountants or other professional advisers.

These are only guidelines. Underwriters usually want to establish that the cover is reasonable, so it's about building the case and justifying the level of cover.