# What Is Net Asset Value Per Share (NAVPS)?

![Net Asset Value Per Share (NAVPS)](https://www.investopedia.com/thmb/Pxt2_dpHWw2f1Ne8OjSo_Ik0P9s=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/NAVPSv1-71ad2ba0a0354f5f81d20f806737b008.jpg)

*— Investopedia / Jake Shi*

> **Definition**
>
> Net asset value per share is a financial ratio that represents a fund's value per share.

## What Is NAVPS?

Net asset value per share (NAVPS) is calculated by dividing the total [net asset value](https://www.investopedia.com/terms/n/nav.asp) of a fund or company by the number of shares outstanding. It's also known as book value per share.  

### Key Takeaways

*   NAVPS is often used with open-end mutual funds because shares are redeemed at their NAV.
*   Market price and NAVPS vary for closed-end funds and ETFs.
*   NAVPS isn't an indicator of performance.
*   It's updated once a day after the U.S. stock market closes.

## Formula

Net asset value per share (NAVPS) is calculated by dividing the net asset value by the number of shares outstanding. The formula to calculate NAVPS is:  

$\begin{aligned} &\text{Net Asset Value Per Share} = \frac{ \text{NAV} }{ \text{Shares Outstanding} }\\ &\textbf{where:} \\ &\text{NAV} = \text{Assets} - \text{Liabilities} \\ \end{aligned}$  

## Example of NAVPS

Consider a [mutual fund](https://www.investopedia.com/terms/m/mutualfund.asp) with 7.5 million shares outstanding with $500 million in investments, $15 million in cash, $1.5 million in receivables, and $250,000 in accrued income. The fund has $20 million in short-term 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:

$\begin{aligned} \text{Assets} =& \ \$500,000,000 + \$15,000,000 + \$1,500,000 \\ \phantom{\text{Assets =}} &+ \ \$250,000 = \$516,750,000 \\ \text{Liabilities} =& \ \$20,000,000 + \$5,000,000 + \$35,000 \\ \phantom{\text{Liabilities} =} &+ \ \$15,000 = \$25,050,000 \\ \text{NAVPS} =& \ \frac{ \$516,750,000 - \$25,050,000 }{ 7,500,000 } \\ =& \ \frac{ \$491,700,000 }{ 7,500,000 } = \$65.56 \\ \end{aligned}$

## NAVPS vs. Market Price

For a mutual fund or open-ended fund, the NAVPS is the price at which shares are bought and sold at the end of each trading day.

Closed-end funds and [exchange-traded funds (ETFs)](https://www.investopedia.com/terms/e/etf.asp) are traded like stocks and priced throughout the trading day. These funds are subject to market forces so their NAVPS may diverge from the actual buying and selling prices of the funds.

Hence, the market price and NAVPS of ETFs may differ. For example, the market price of the SPDR S&P 500 ETF was $571.41 on Sept. 25, 2024, while its NAVPS recorded as $571.01 at the end of the day, Sept. 24, 2024.

> **Important**
>
> The SEC regulates funds per the Investment Company Act of 1940 which regulates the financial companies, including mutual funds, that invest, reinvest, and trade securities available to the public.

## Why NAVPS Matters

Shares of open-end or mutual funds registered with the U.S. [Securities and Exchange Commission (SEC)](https://www.investopedia.com/terms/s/sec.asp) are redeemed at their net asset value.

NAVPS provides insight into a fund's assets and liabilities. The formula includes the total market value of the fund's investments, [cash and cash equivalents](https://www.investopedia.com/terms/c/cashandcashequivalents.asp), receivables, and accrued income. Liabilities equal total short-term and long-term liabilities, plus all [accrued expenses](https://www.investopedia.com/terms/a/accruedexpense.asp), such as staff salaries, utilities, and other operational expenses. Expenses may be substantial because management expenses, distribution and marketing expenses, transfer agent fees, custodian, and audit fees may be included.

In the context of corporate financial statements of publicly traded companies, the NAVPS or book value per share may show below the market price per share. The [historical cost](https://www.investopedia.com/terms/h/historical-cost.asp) 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. This is a limitation of NAVPS.

## What Does NAVPS Mean for Investors?

Some investors may incorrectly believe that a high NAVPS means it is too expensive and will provide a poor return on investment. However, the NAVPS is not an indicator of the performance of the fund. The NAVPS is simply the dollar amount cost per share. An investor with $20,000 could receive 200 units of a mutual fund with a NAVPS of $100 or 100 units of a mutual fund with a NAVPS of $200.  

## What Is the Difference Between an Open-Ended Fund and a Closed-End Fund?

A closed-end fund has a fixed number of shares offered through an initial public offering. Open-end funds do not have a fixed number of shares and are offered through a fund company that sells shares directly to investors.

  

## What Time Is NAVPS Declared?

The NAVPS values of mutual funds are updated once a day after the U.S. stock market closes at 4 p.m. Eastern Standard Time (EST). There is no set deadline for when a mutual fund must update and submit its NAVPS to regulatory agencies. For more on this topic, read [When Do Mutual Funds Update Their Prices?](https://www.investopedia.com/ask/answers/101215/how-often-are-mutual-fund-prices-updated.asp)

## The Bottom Line

Also known as book value per share, the net asset value per share (NAVPS) is the value per share of a mutual fund, ETF, or closed-end fund. It is declared once a day after the close of the U.S. stock market, though the actual market price per share of a particular fund may be higher than its NAVPS.

> **Article Sources**
>
> 1.  Morningstar. "[SPDR S&P 500 ETF Trust](https://www.morningstar.com/etfs/arcx/spy/quote)."
>     
> 2.  U.S. Securities and Exchange Commission. "[Laws and Rules](https://www.sec.gov/investment/laws-and-rules)."