Net Tangible Assets (NTA)
Net tangible assets (NTA) means total assets of a company after minus the liabilities and intangible assets (patents and goodwill). In others words, net tangible assets is what company physically owned and can be sold.
These tangible assets are the things that can be touch, see and sell. These tangible assets could be machine, factory, shop house, inventories and etc. Tangible assets keep the business running smoothly.
Use of NTA? If you divided NTA by number of shares, you will get NTA per share. NTA per share let us know the value of a company. Investor tend to use NTA per share to judge whether a company is undervalued or overvalued or at the fair price. If the stock price is below the NTA per share, investor act it as undervalue company and vice versa.
