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Zale Corp (NYSE:ZLC)
Net Current Asset Value Per Share
\$-3.55 (As of Jan. 2014)

In calculating the Net Current Asset Value (NCAV), Benjamin Graham means a company's current assets (such as cash, marketable securities, and inventories) minus its total liabilities (including preferred stock and long-term debt).

Zale Corp's net current asset value per share for the quarter that ended in Jan. 2014 was \$-3.55.

Definition

Zale Corp's Net Current Asset Value (NCAV) per share for the fiscal year that ended in Jul. 2013 is calculated as

 Net Current Asset Value Per Share (A: Jul. 2013 ) = (Total Current Assets - Total Liabilities - Preferred Stock) / Shares Outstanding = (837.22 - 1001.926 - 0) / 32.64 = -5.05

Zale Corp's Net Current Asset Value (NCAV) per share for the quarter that ended in Jan. 2014 is calculated as

 Net Current Asset Value Per Share (Q: Jan. 2014 ) = (Total Current Assets - Total Liabilities - Preferred Stock) / Shares Outstanding = (935.786 - 1088.631 - 0) / 43.10 = -3.55

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

Explanation

Benjamin Graham first discussed net current asset value (NCAV) in the 1934 edition of "Security Analysis", which he coauthored with David Dodd. In the book, (net) current asset value is defined as:" current assets alone, minus all liabilities and claims ahead of the issue."

The common definition of NCAV is: NCAV = current assets – [total liabilities + preferred stock]

Net current assets exclude not only the intangible assets but also the fixed and miscellaneous assets. In addition, Graham believed that preferred stock belongs on the liability side of the balance sheet, not as part of capital and surplus. In "Security Analysis", preferred stock is dubbed "an imperfect creditorship position" that is best placed on the balance sheet alongside funded debt.

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

Historical Data

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

Zale Corp Annual Data

 Jul04 Jul05 Jul06 Jul07 Jul08 Jul09 Jul10 Jul11 Jul12 Jul13 NCAV 6.50 8.00 8.05 9.40 4.15 -1.25 -2.52 -5.33 -5.67 -5.05

Zale Corp Quarterly Data

 Oct11 Jan12 Apr12 Jul12 Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 NCAV -6.30 -5.27 -5.02 -5.67 -6.45 -4.99 -4.57 -5.05 -6.03 -3.55
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