how navps is used
the net asset value per share navps is often used in relation to open end or mutual funds since shares of such funds registered with the u s securities and exchange commission sec are redeemed at their net asset value referring to the formula for net asset value per share navps above assets include the total market value of the fund s investments cash and cash equivalents receivables and accrued income liabilities equal total short term and long term liabilities plus all accrued expenses such as staff salaries utilities and other operational expenses the total number of expenses may be substantial because management expenses distribution and marketing expenses transfer agent fees custodian and audit fees may all be included example of how to use net asset value per share navpsconsider a mutual fund with 7 5 million shares outstanding that has 500 million in investments 15 million in cash 1 5 million in receivables and 250 000 in accrued income as for 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 assets 500 000 000 15 000 000 1 500 000 assets 250 000 516 750 000 liabilities 20 000 000 5 000 000 35 000 liabilities 15 000 25 050 000 navps 516 750 000 25 050 000 7 500 000 491 700 000 7 500 000 65 56 begin aligned text assets 500 000 000 15 000 000 1 500 000 phantom text assets 250 000 516 750 000 text liabilities 20 000 000 5 000 000 35 000 phantom text liabilities 15 000 25 050 000 text navps frac 516 750 000 25 050 000 7 500 000 frac 491 700 000 7 500 000 65 56 end aligned assets assets liabilities liabilities navps 500 000 000 15 000 000 1 500 000 250 000 516 750 000 20 000 000 5 000 000 35 000 15 000 25 050 000 7 500 000 516 750 000 25 050 000 7 500 000 491 700 000 65 56 for mutual funds and etfs the navps is often readily available on sites like morningstar as noted below the market price and navps of etfs may differ for example the market price of the spdr s p 500 etf is 402 63 as of aug 29 2022 while its navps is recorded as 405 24 on morningstar 1the difference between navps and market pricefor a mutual fund the navps is the price at which shares are bought and sold at the end of each trading day exchange traded funds etfs s and closed end funds are different in that they trade as stocks throughout the trading day because these types of funds are subject to market forces their navps at any given time may diverge from the actual buying and selling prices of the funds the navps values of etfs and closed end funds are calculated at the end of the trading day for reporting purposes but are updated many times per minute in real time throughout the trading day limitations of using net asset value per share navpsin the context of corporate financial statements of publicly traded companies the navps or book value per share is usually below the market price per share the historical cost accounting principle which tends to understate certain asset values and the supply and demand forces of the marketplace generally push stock prices above book value per share valuations learn more about net asset value per share navpsfor related insight read more about the difference between an etf s navps and market price 