Net tangible assets,
Definition of Net tangible assets:
To calculate a company's net tangible asset per share of common stock, divide the net tangible assets figure by the number of shares of common stock outstanding.
Net tangible assets are calculated as the total assets of a company, minus any intangible assets such as goodwill, patents, and trademarks, less all liabilities and the par value of preferred stock. In other words, its focus is on physical assets such as property, plant, and equipment, as well as inventories and cash instruments.
Formula: Total fair market value of all intangible assets - (Goodwill + Total liabilities).
How to use Net tangible assets in a sentence?
- To calculate a company's net tangible assets, subtract its par value of preferred shares and any intangible assets, such as goodwill, patents, and trademarks from its total assets.
- Net tangible assets are listed on a company's balance sheet and indicate its book value based on the amount of its total assets less all liabilities and intangible assets.
- Net tangible assets allow analysts to focus on a firm's physical assets in isolation.
Meaning of Net tangible assets & Net tangible assets Definition