Benjamin Graham (1894-1976) is considered by many to be architect of Fundamental Analysis and Value Investing. Graham liked to find discrepancies between a stock's price and its value and would buy large portfolios of undervalued stocks, holding them until they became fully valued. In his 1949 book "The Intelligent Investor, Graham describes a stock selection technique that identifies stocks that are trading at a deep discount to a calculated value termed Net Current Asset Value or NCAV.

Calculation of a stock's NCAV is a fairly simple endeavor and is somewhat different from calculation of Book Value. Whereas Book Value is purely a per share measure of Assets - Liabilities, NCAV is a little more rigorous.

In calculating NCAV, Graham only considered Current Assets, i.e. cash, cash equivalents, accounts receivable, inventories. However, from this value he still subtracted Total Liabilities. The result he then divided by number of shares outstanding to give NCAV per share. This value would be considered by Graham to be a fair value for stock.

You might think he would buy at this price, but no. Graham only bought stocks that were trading under two-thirds or 66% of their NCAV. Consider as an example G-III Apparel Group Ltd, ticker symbol GIII.

Current Assets are $130.25M, Total Liabilities are $68.3M, and there are 7.22M shares outstanding.

NCAV = (130.25 - 68.3) / 7.22 = $8.58.

Two-thirds of this price would be $5.66. At time of writing (03/07/05), GIII is trading at $7.67, so may not be a buy candidate at present. It is important to note that Graham would consider NCAV to be a first step in further analysis of stock. A sensible investor would investigate balance sheet further to check for a sound business with other desirable factors such as good earnings,revenue growth, low debt-to-equity, and good operational cash flow per share.

You're not alone. Many people face a financial crisis some time in their lives. Whether crisis is caused by personal or family illness, loss of a job, or overspending, it can seem overwhelming. But often, it can be overcome. Your financial situation doesn't have to go from bad to worse.

If you or someone you know is in financial hot water consider options below. How do you know which will work best for you? It depends on your level of debt, your level of discipline, and your prospects for future.

Developing a Budget: The first step toward taking control of your financial situation, is to do a realistic assessment of how much money you earn and how much money you spend. Start by listing your income from all sources. Then, list your "fixed" expenses — those that are same each month — like mortgage payments or rent, car payments, and insurance premiums. Next, list expenses that vary — like entertainment, recreation, and clothing. Writing down all your expenses, even those that seem insignificant, is a helpful way to track your spending patterns, identify necessary expenses, and prioritize rest. The goal is to make sure you can make ends meet on basics: housing, food, health care, insurance, and education. Your public library and bookstores have information about budgeting and money management techniques. In addition, computer software programs can be useful tools for developing and maintaining a budget, balancing your cheque book, and creating plans to save money and pay down your debt.