What is RNAV? Is it the same as NAV? How do you calculate RNAV

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Take note that NAV is make up of tangible and intangible assets (goodwill, brand or patent right,etc). So, it is better to be conservative to consider using NTA (net tangible asset).

As curiousparty has pointed out earlier, the R stands for realisable. Hence, RNAV means realisable net asset value.

In order to calculate RNAV, you remove the goodwill and intangibles from assets in the balance sheet and offset the remaining amount against the liabilities. The ouput will be the RNAV.

When applying this calculation, the assets you are using will be mainly equipment, inventories & cash. Normally to be conservative, i tend to apply a further discount on the equipment & inventories. Thus, the final number will be even smaller and this ties back to the net-net stock concept which i mentioned in my other post earlier.

Sorry to bump an old thread, but these 2 posts seem to conflict each other.

What Ray168 says doesn't make sense... Aren't NAV and Net Tangible assets synonyms for (Total Assets - Intangible Assets - Total Liabilities)?

NAV = Book Value = NTA + Intangibles
NCAV = net net = Current assets - All liabilities

AFAIK, for NCAV, no need to further discount for the equipment or inventories as it already contains a discount since fixed assets were left out.
level13 is probably talking about the more detailed method in computing a liquidation value for a manufacturing company, in which each asset category is assigned a discount.

Hi smallcaps,

Thank you for the reply.

Why do you suddenly talk about NCAV? There are no doubts on that.

Also, your formula for NAV = Book Value = NTA + Intangibles seems to conflict with the definition of NTA here: http://www.investopedia.com/terms/n/nett...assets.asp
where it says that NAV = Book value = NTA.

It seems like there are many different interpretations to these terms :/

Yep, this is the one for equity book value:

http://www.investopedia.com/terms/b/book...common.asp

And a more detailed explanation from wiki:

http://en.wikipedia.org/wiki/Book_value

Traditionally, a company's book value is its total assets minus intangible assets and liabilities. However, in practice, depending on the source of the calculation, book value may variably include goodwill, intangible assets, or both.[3] When intangible assets and goodwill are explicitly excluded, the metric is often specified to be "tangible book value".

Understand that Graham's usage of book value by default refers to tangible book value, but personally find it clearer to use NTA instead, and use book value for equity. For myself, hardly come into contact with preferred portion of equity so dun really differentiate btw them.