This price should be above the current market but in most cases below the net quick assets per share and therefore far below the book value.
Yet not only may the company have fifteen million in the treasury, but it could borrow large additional amounts against its many millions of other quick assets.
More significant still is the fact that an amazingly large percentage of all industrial companies are selling for less than their quick assets alone leaving out their plants and other fixed assets entirely.
Recently Hamilton Woolen has offered to buy one-sixth of the outstanding shares pro rata at $65, which is about equal to the net quick assets and considerably above the previous market price.
The Fisk Rubber Co., for example, showed around $400 in cash on hand for each $1,000 of overdue debt, and nearly $900 in net quick assets, excluding the extensive factories, etc.
Directors and stockholders both would recognize that the true value of their stock should under no circumstances be less than the realizable value of the business, which amount in turn would ordinarily be not less than the net quick assets.
Enter to cell B12, Quick Assets / Current Liabilities (see Tips below).
A more stringent test is to calculate the quick net asset value by subtracting inventory (which may be illiquid) and total current liabilities from current assets.
Not that Burgess was there to put on circulation, but he was undoubtedly an asset – quick, reliable, authoritative, a good name to have associated with your pages.
In particular, some investors would like Citigroup to be quicker about selling assets in Citi Holdings, the bad bank that Citigroup set up for its unwanted and loss-making assets.
