Starlight Horizons
Starlight Horizons Corporation
New Eden Research
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Posted - 2008.05.31 04:10:00 -
[1]
 Originally by: Maestro DelTirith
Looking for advice on how I am calculating NAV if anybody has some contrary thoughts...in the end I imagine it is irrelevant, so long as it is consistent, however I'd like to make sure I am reading things right (being a newb leads to some doubts :) )
Right now I am taking my Wallet actual ISK and calling that cash
Then I go to Market, click on Orders, and down at the bottom is an escrow amount...I call that escrow
Then i go to my sell orders and my items sitting in Assets, and for each I pull up the highest regional Buy order (NOT sell order...i.e. if I had to liquidate right now, I could sell it to a buy order for that amount) and call that the value. It is obviously less than what I plan to sell it for, but I figure it makes sense to ensure I'm not inflating based on speculation.
Appreciate any thoughts on this.
Well it really depends on how anal you are when determining the value of your inventory. Cash and escrow are easy, its those items you are selling that are tricky. I have built a nice spreadsheet that I input the highest buy order of each mineral and then I have it linked to each item to reflect what its mineral value is worth. I created the spreadsheet by actually going through each item I was trading and clicking on the refine button and typing in the mineral values. I have a corp standing of 7.00 so I get 100% refine, no lost minerals due to tax or lack of skills. This gives me an instant accounting to the liquid value of my inventory which is what I report as NAV for my IPO STR-H.
From my good old accounting 101 college course book NAV is very simple: Your Assets - Liabilities = Owner's Equity. The isk in your wallet is an Asset, along with all of your inventory and Escrow. Your add up broker fees and taxes as Liabilities. Your initial investment into your trading career is your owner's equity. The equation always has to be equal, which means that you can move the columns around, ie Assets = Liabilities + Owner's Equity or Assets - Liabilities = Owner Equity as long as you get the same number each time.
Example
You start with 500,000 isk as your initial investment so that is your Owner's Equity. Your NAV is 500,000 and your equation reads as such:
Assets - Cash 500,000 Liabilities - 0 Owner's Equity - 500,000
Now, you put up a buy order for 50 Asymmetric Energy Succor I at 2,000 isk p/u.
Assets - Cash 399,219.42 / Escrow 100,000 Liabilities - Broker's Fee 780.58 Owner's Equity - 499,219.42
Right now you are technically down 780.58 isk in broker's fee as you haven't bought or sold anything but you have expanded resources to gain the ability to purchase inventory. Now, you being a smart trader know that the Asymmetric Energy Succor I has a mineral value of 4,237.09 isk with your refine, well actually my refine. With every Succor you buy via your buy order your equation changes but you know you are building up potential profits. It is up to you to figure out the turn-over rate of which items you sell, when to refine and sell the minerals, when to refine and build T1 modules that will net you a gain over the mineral value etc...Consider this a free tip, I have moved on to bigger and better items, I no longer purchase items with a mineral value of less than 50k, unless the market is to easy to scoop up and score cheap minerals.
Keep good notes, focus on a good 5 to 10 items at first. Some other keys are to know what types of ships people are flying in your region, what types of NPC's are they fighting, how are they fitting their ships, which loot is common drops, where will ammo sell quickly, cap boosters and drones etc...You might need to read up on the ships forum to find out what people fit, or sit outside a busy station and just watch people dock and un dock. Intelligence is your friend. If you have any other questions, post them or evemail me.
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