Calculating the Net Tangible Assets (NTA) of a company is a method of financial valuation that helps to gauge the true value of a company. The NTA of a company is the value of a company's physical assets. These assets include the physical plant and monetary reserves of the company, but do not include such intangible assets as patents. You will often find NTA referred to as the Book Value of a company. For best results, as a business valuation method, use NTA with companies that engage in traditional retail and production operations where intangible assets form a small portion of the company's total worth.
Obtain the financial statements of the company for which you wish to calculate the Net Tangible Assets. Get these statements by contacting the company directly, downloading from their website, or by searching the Security and Exchange Commission's website for company filings.
Find the company's total assets listed in the company's balance sheet. Locate the balance sheet within the annual or quarterly report for the company.
Subtract the company's liabilities also found on the balance sheet from the company total assets. This gives you the company's net worth, which is the total value of the company if sold at the time of calculation.
Subtract the intangible assets of the company, which includes any patents, trademarks, copyrights and goodwill possessed by the company. You can find this value in the balance sheets as well. The result is the Net Tangible Assets of the company.
When valuing a company, it's best to use several methods of valuation to get a clear view of the company's actual worth.
Tips and warnings
- When valuing a company, it's best to use several methods of valuation to get a clear view of the company's actual worth.
Things you need
- Company financial statements