Net assets
The difference between a company’s total assets and total liabilities, equivalent to shareholders' equity on the balance sheet. The revalued net asset value (NAV) replaces book values with market values for each asset class.
In practice
Book net assets rarely equal market value for an operational business. For a trading company, value depends on future cash flows — earnings multiples — not the carrying amount of assets. A negative net asset position does not necessarily signal distress: many high-growth startups run negative book equity when launch costs exceed retained earnings, without any threat to operational viability. Investors read net assets alongside EBITDA and free cash flow for a complete picture.