Net Asset Value Per Share - NAVPS

What Is Net Asset Value Per Share - NAVPS?

Net asset value per share (NAVPS) is an articulation for net asset value that addresses the value per share of a mutual fund, an exchange-traded fund (ETF), or a closed-end fund. It is calculated by separating the total net asset value of the fund or company by the number of shares outstanding and is otherwise called book value per share.

The Formula for Net Asset Value Per Share - NAVPS Is

$\begin &\text = \frac{ \text }{ \text }\ &\textbf \ &\text = \text - \text \ \end$

The most effective method to Calculate Net Asset Value Per Share - NAVPS

Net asset value per share (NAVPS) is calculated by separating the net asset value by the number of shares outstanding.

What Does NAVPS Tell You?

The net asset value per share (NAVPS) is many times utilized corresponding to open-end or mutual funds since shares of such funds registered with the U.S. Securities and Exchange Commission (SEC) are recovered at their net asset value.

Alluding to the formula for net asset value per share (NAVPS) above, assets incorporate the total market value of the fund's investments, cash and cash equivalents, receivables, and accrued income. Liabilities equivalent total short-term and long-term liabilities, plus all accrued expenses, like staff salaries, utilities, and other operational expenses. The total number of expenses might be large as management expenses, distribution and marketing expenses, transfer agent fees, custodian, and audit fees may be generally included.

Illustration of How to Use Net Asset Value Per Share - NAVPS

Consider a mutual fund with 7.5 million shares outstanding has $500 million in investments, $15 million in cash, $1.5 million in receivables and accrued income of $250,000. With respect to liabilities, the fund has $20 million in short-term liabilities and $5 million in long-term liabilities. The fund has $35,000 of accrued operational expenses and $15,000 of other accrued expenses. The assets, liabilities and NAVPS are calculated as:
$\begin \text =& \ $500,000,000 + $15,000,000 + $1,500,000 \ \phantom{\text{Assets =}} &+ \ $250,000 = $516,750,000 \ \text =& \ $20,000,000 + $5,000,000 + $35,000 \ \phantom{\text =} &+ \ $15,000 = $25,050,000 \ \text =& \ \frac{ $516,750,000 - $25,050,000 }{ 7,500,000 } \ =& \ \frac{ $491,700,000 }{ 7,500,000 } = $65.56 \ \end$
For mutual funds and ETFs, the NAVPS is in many cases promptly accessible on destinations like Morningstar. As verified below, the market price and NAVPS of ETFs might vary. For instance, the market price of the SPDR S&P 500 ETF is $279.14 as of Feb. 22, 2019, while its NAVPS is recorded as $279.18 on Morningstar.

The Difference Between NAVPS and Market Price

For a mutual fund, the NAVPS is the price at what shares are bought and sold toward the end of each trading day. Exchange-traded funds (ETFs) and closed-end funds are different in that they trade as stocks all through the trading day. Since these types of funds are subject to market powers, their NAVPS at some random time might wander from the genuine buying and selling prices of the funds.

The NAVPS for ETFs and closed-end funds are calculated toward the end of the trading day for reporting however are refreshed frequently in real time all through the trading day.

Limitations of Using Net Asset Value Per Share - NAVPS

With regards to corporate financial statements of publicly traded companies, the NAVPS or book value per share is for the most part below the market price per share. The historical cost accounting principle, which tends to downplay certain asset values, and the supply and demand powers of the marketplace generally push stock prices above book value per share valuations.

Features

• NAVPS addresses the value per share of a mutual fund, ETF, or closed-end fund.
• Market price and NAVPS, nonetheless, may change for closed-end funds and ETFs.
• It is in many cases utilized corresponding to open-end mutual funds since shares are recovered at their NAV.