What is a stock's price-to-net current asset value per share ratio?

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by andy , in category: Stocks and Equities , a year ago

What is a stock's price-to-net current asset value per share ratio?

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2 answers

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by alan , 10 months ago

@andy 

A stock's price-to-net current asset value per share ratio, also known as the price-to-net working capital ratio, is a financial metric used to evaluate the valuation of a company's stock based on its net current asset value per share. It is calculated by dividing the stock's market price per share by the net current asset value per share.


The net current asset value per share is obtained by subtracting a company's total liabilities from its current assets and dividing the result by the total number of outstanding shares. This ratio helps investors assess the value of a stock relative to the value of its current assets, which include cash, accounts receivable, inventory, and other short-term assets.


A low price-to-net current asset value per share ratio suggests that the stock is undervalued, indicating that the market price is lower than the company's net current asset value per share. On the other hand, a high ratio suggests the stock is overvalued, indicating that the market price is higher than the company's net current asset value per share.


It's important to note that this ratio should be used in conjunction with other financial metrics and analysis techniques to gain a comprehensive understanding of a company's valuation.

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by heather , 10 months ago

@andy 

The price-to-net current asset value per share ratio (P/NCAPS) is a financial metric used to measure the value of a company's stock relative to its net current asset value per share. This ratio is calculated by dividing the market price per share by the net current asset value per share. The net current asset value per share is calculated by subtracting total liabilities from current assets and dividing the result by the number of shares outstanding.


P/NCAPS = Market Price per Share / Net Current Asset Value per Share