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Primus Guaranty Ltd. (OTCPK:PRSG)
Net Current Asset Value
$-18.37 (As of Dec. 2011)

In calculating the Net Current Asset Value (NCAV), Benjamin Graham assumed that a company’s accounts receivable is only worth 75% its value, its inventory is only worth 50% of its value, but its liabilities have to be paid in full. This is a conservative way of estimating the company’s value.

Primus Guaranty Ltd.'s net current asset value per share for the quarter that ended in Dec. 2011 was $-18.37.


Definition

Primus Guaranty Ltd.'s Net Current Asset Value (NCAV) per share for the fiscal year that ended in Dec. 2011 is calculated as

Net Current Asset Value(A: Dec. 2011 )
=(CashAndCashEquivalents-Total Liabilities+0.75 * Acct. Receivable+0.5 * Inventory)/Shares Outstanding
=(87.247-731.462+0.75 * 5.725+0.5 * 0)/34.84
=-18.37

Primus Guaranty Ltd.'s Net Current Asset Value (NCAV) per share for the quarter that ended in Dec. 2011 is calculated as

Net Current Asset Value(Q: Dec. 2011 )
=(CashAndCashEquivalents-Total Liabilities+0.75 * Acct. Receivable+0.5 * Inventory)/Shares Outstanding
=(87.247-731.462+0.75 * 5.725+0.5 * 0)/34.84
=-18.37

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

In calculating the Net Current Asset Value (NCAV), Benjamin Graham assumed that a company’s accounts receivable is only worth 75% its value, its inventory is only worth 50% of its value, but its liabilities have to be paid in full. This is a conservative way of estimating the company’s value.


Explanation

One research study, covering the years 1970 through 1983 showed that portfolios picked at the beginning of each year, and held for one year, returned 29.4 percent, on average, over the 13-year period, compared to 11.5 percent for the S&P 500 Index. Other studies of Graham’s strategy produced similar results.

Benjamin Graham looked for companies whose market values were less than two-thirds of their net-net value. They are collected under our Net-Net screener. GuruFocus also publishes a monthly Net-Net newsletter.


Related Terms

Cash and Cash Equivalents, Total Liabilities, Accounts Receivable, Inventory, Net Cash


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Primus Guaranty Ltd. Annual Data

Dec02Dec03Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11
NCAV 44.524.533.30-5.51-5.26-16.29-51.10-20.15-14.28-18.37

Primus Guaranty Ltd. Quarterly Data

Sep09Dec09Mar10Jun10Sep10Dec10Mar11Jun11Sep11Dec11
NCAV -21.07-20.15-74.82-83.28-80.68-14.28-14.67-11.79-20.56-18.37
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