RE:Two quick notes while awaiting the financials and MD&ANo futher impairments and write-downs this quarter.
TNW was $45,627. They are a survivor with extraordinary leverage, but some patience is required.
TNW is a more conserative version of the shareholders' equity metric. https://www.investopedia.com/ask/answers/062615/what-difference-between-shareholder-equity-and-net-tangible-assets.asp Net tangible assets is the theoretical value of a company’s physical assets.
Shareholder equity is the residual claim that shareholders have after all debts are paid. Shareholder equity is calculated as assets less liabilities. It’s also called a company’s book value. That is, theoretically, if a company were to sell all its assets and pay its debts, the shareholder equity should be what’s leftover. This isn’t always the case as the assets carried on the balance sheet are done so at a value that’s generally not the same as
fair market value (FMW)
The net tangible asset formula is assets of a company less liabilities,
intangible assets and the par value of preferred shares. This formula looks to determine what physical assets the company has, less any debts. Basically, net tangible assets is the company’s book value of physical assets. In addition to goodwill, intangible assets may include patents and trademarks.
Shareholder Equity vs. Net Tangible Assets Example
For example, as of Oct. 31, 2019, Walmart had total assets of $239.8 billion, total liabilities of $161.5 billion, goodwill of $30.7 billion, and no preferred stock. Apple also has common stock worth $23.313 billion, retained earnings of $87.152 billion and other stockholders' equity of $1.082 billion.
Therefore, Walmart had total shareholders' equity of $78.3 billion, or assets less liabilities ($239.8 billion - $161.5 billion). Conversely, it has net tangible assets of $47.6 billion, or total assets less goodwill and liabilities ($239.8 billion - $30.7 billion - $161.5 billion). While shareholders' equity includes Walmart’s intangible assets, its net tangible assets exclude those values.