What Are Net Tangible Assets? How to Calculate Them
By Markets & Investing DeskUpdated Nov 10, 2026
Key takeaways
- NTA starts with total assets, then removes intangibles (goodwill, patents, trademarks and similar items) and all liabilities.
- Tangible assets have a finite monetary value and usually take physical form, such as cash, inventory, property and equipment.
- If a company has no intangible assets, its NTA equals its shareholders' equity (assuming no preferred stock adjustment).
- NTA is a book value measure, not a market value, and it can be negative.
Net tangible assets (NTA) are what a company’s balance sheet shows it owns in physical and financial assets after removing intangible assets and paying off all liabilities. The formula is:
Net Tangible Assets = Total Assets − Intangible Assets − Total Liabilities
Some analysts also subtract the par value of preferred stock, so the result reflects only what would belong to common shareholders. All of the inputs come from the balance sheet.
Understanding Net Tangible Assets
NTA is closely related to shareholders’ equity. Equity is total assets minus total liabilities, which is also called net assets. NTA goes one step further by stripping out intangible assets, whose balance sheet values depend on accounting judgments and can fall sharply through impairments.
Goodwill is the largest intangible for many companies. It arises when one company buys another for more than the fair value of its identifiable net assets. Patents, trademarks, customer lists and licenses are recorded as separate intangibles. Removing all of these leaves a narrower figure: the book value supported by assets that could more readily be sold or used to cover obligations.
Lenders and investors use NTA to judge how much asset backing sits behind a company’s debt or its share price. Dividing NTA by shares outstanding gives NTA per share, which can be compared with the stock price, much as book value per share is.
Examples of Net Tangible Asset Calculations
These figures come from the companies’ 2014 annual reports filed with the SEC (Form 10-K).
Zulily (as of Dec. 28, 2014): total assets of $492.378 million and total liabilities of $216.415 million, with no intangible assets or goodwill. NTA = $492.378M − $216.415M = $275.963 million, the same as its total shareholders’ equity.
Facebook, now Meta (as of Dec. 31, 2014): total assets of $40.184 billion, total liabilities of $4.088 billion, intangible assets of $3.929 billion and goodwill of $17.981 billion. NTA = $40.184B − $4.088B − $3.929B − $17.981B = $14.186 billion.
Goodwill and intangibles together totaled $21.910 billion, more than half of Facebook’s total assets. Its NTA was therefore far below its shareholders’ equity of $36.096 billion.
Amazon (as of Dec. 31, 2014): total assets of $54.505 billion, total liabilities of $43.764 billion and goodwill of $3.319 billion, the only intangible deducted in this calculation. NTA = $54.505B − $43.764B − $3.319B = $7.422 billion.
When NTA Can Mislead
Intangible-heavy businesses. Software, media, pharmaceutical and consumer brand companies often hold most of their value in intellectual property, brands and acquired goodwill. A low or negative NTA does not mean such a company is worthless. It means its balance sheet depends on assets that this measure deliberately excludes. Internally developed brands and know-how are mostly not capitalized at all, so book figures miss them in either case.
Book value is not market value. Tangible assets are carried at historical cost less depreciation in many cases. Land bought decades ago may be recorded well below what it would sell for, and specialized equipment may fetch less than its carrying amount.
Definitions differ. Some calculations deduct only goodwill, others all intangibles, and some also subtract preferred stock par value or other items. When you compare two companies or two data sources, confirm that both use the same deductions.
Negative results. If liabilities plus intangibles exceed total assets, NTA is negative. Companies that funded large acquisitions with debt often fall into this category.
NTA works best as one input among several. For methods that capture earnings power and intangible value, see business valuation methods.
FAQs
Is net tangible assets the same as tangible book value?
Generally yes. Both terms describe equity after removing intangible assets. Check whether a given source also deducts preferred stock.
What is a good NTA figure?
No single threshold applies. NTA is most useful when compared over time for the same company or against peers in the same industry, because asset-heavy and asset-light sectors produce very different levels.
The Bottom Line
Net tangible assets matter most to lenders and investors who want to see how much physical and financial asset backing supports a company's debt or share price. Use NTA as one input among several, because it excludes intangibles that drive value at software, media, pharmaceutical and brand companies. When comparing companies or data sources, confirm that both calculations deduct the same items.
