BUSINESS SPEAK · NAV
NAV: Net asset value
What is owned minus what is owed.
What it means
NAV is total assets minus total liabilities. Divide it by the number of shares and you get NAV per share — the price mutual funds and ETFs report every day.
Where you’ll meet it
- NAV is the floor of an asset-based valuation: what would be left if everything were sold and all debts paid.
- It ignores future earnings, so a profitable business is usually worth more than its NAV.
Worked example
Scenario: A fund holds 1,000,000 of investments, owes 200,000 and has 100,000 units.
- NAV: 1,000,000 − 200,000 = 800,000
- Per unit: 800,000 ÷ 100,000 = 8
Answer: NAV is 800,000, or 8 per unit.