Definition of Net Asset Value (NAV)

1. in mutual fund, the per share value of assets in a fund, computed by subtracting liabilities from the portfolio value of securities held, plus cash and accrued earnings, and dividing the total by the number of outstanding shares. This is the value all shareholders would receive if all issued shares were redeemed. In a no-load fund, this value is the bid price quoted in the mutual fund listings in daily newspapers. In a load fund, the bid price is figured by adding the sales commission to the NAV. Mutual funds compute net asset value daily, based on closing prices on the previous business day. The asked or offered column in tables in a mutual fund prospectus shows the price after load is added.
2. tangible book net worth of a corporation's securities, usually stated as net value per share. For example, the book value of common stock is the difference between the accounting value of outstanding stock and all liabilities plus intangibles, such as goodwill and depreciation, divided by the number of shares issued. This value, also called tangible book value, also is computed for bonds, preferred stock, and so on, and is unrelated to market value.

accounting term similar in meaning to book value and net worth; most often used in reference to the value of mutual fund and similar investment shares.

1. in mutual funds, the market value of a fund share, synonymous with bid price. In the case of no-load funds, the NAV, market price, and offering price are all the same figure, which the public pays to buy shares; load fund market or offer prices are quoted after adding the sales charge to the net asset value. NAV is calculated by most funds after the close of the exchanges each day by taking the closing market value of all securities owned plus all other assets such as cash, subtracting all liabilities, then dividing the result (total net assets) by the total number of shares outstanding. The number of shares outstanding can vary each day depending on the number of purchases and redemptions.
2. book value of a company's different classes of securities, usually stated as net asset value per bond, net asset value per share of preferred stock, and net book value per common share of common stock. The formula for computing net asset value is total assets less any intangible asset less all liabilities and securities having a prior claim, divided by the number of units outstanding (i.e., bonds, preferred shares, or common shares). See book value for a discussion of how these values are calculated and what they mean. See also Defined Asset Funds ; Exchange-Traded Funds.