understanding financial jargon
Net Asset Value (NAV)
The Net Asset Value (NAV) of a company is the value of all assets owned, minus the value of all debts owed. In other words the net asset value is the final value realised if all the assets the company owns were sold off, and all debts repaid. The assets could consist of tangible assets or intangible assets, but to get a true reflection of current NAV, the valuations of assets would have to be fairly recent.
This term is more commonly associated with collective investment funds, particularly investment trusts, Unit trusts and OEIC's where the NAV represents the value of the underlying assets of the fund minus any borrowings the fund may have made. With Unit Trusts and OEIC's the NAV is reflected broadly in the price you pay for shares or units, but with investment trusts, investor sentiment can be negative or positive on the sector the investment trust deals with, so the price can often be at a discount or premium to NAV. It is therefore possible for an investor to effectively buy the underlying assets of an investment trust for less than they are valued at'
What to do if you need more help
If you need more help with your specific commercial loan, mortgage or insurance requirement please speak to a professional financial adviser.
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