Net-Net Working Capital
View All TermsBenjamin Graham defines Net Net Working Capital (NNWC) as:
Net Net Working Capital (NNWC) = Cash and short-term investments + (0.75 * accounts receivable) + (0.5 * inventory) - total liabilities - Preferred Stock - Minority Interest
In calculating the Net Net Working Capital (NNWC), Benjamin Graham assumed that a companyâ„¢s accounts receivable is only worth 75% its value, its inventory is only worth 50% of its value, but its liabilities have to be paid in full. This is a conservative way of estimating the companyâ„¢s value.
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