 Personal finance practice problem using Excel. Mutual fund net asset value per share calculation. Prepare to get financially fit by practicing personal finance. Here we are in our Excel worksheet. If you don't have access to it, that's okay because we'll basically build this from a blank sheet. But if you do have access, three tabs down below. We got the example, practice blank, example in essence, answer key. Let's look at it now. Information on the left, calculations on the right. We're gonna be imagining we are investing in a mutual fund calculating then the net asset value per share calculation. The second tab is gonna be a practice tab, having some pre-formatted cells. So you can work the practice problem with less Excel formatting. The third tab, our blank tab, is where we're gonna do some of the Excel formatting. This is where we will work. If you don't have any of this, that's okay. You can open up a blank sheet. You can add the data on the left. I would start out if having a blank sheet by selecting the entire sheet, possibly with the triangle up top, right clicking on it to put down and lay down your baseline formatting. I usually go to the format cells and go to currency, negative numbers, bracketed, red. And then I remove the dollar sign. I remove the decimals and then I'm not gonna hit okay because I already have this. I'm just gonna X out of it up top. So then you can add your data on the left-hand side. Widening the cells as necessary, make a skinny C column, and then we're good to go. We're gonna be imagining we are investing in a mutual fund. Remember that a mutual fund represents then us putting money into a fund that will be pooled together with other people's investments managed by a fund manager that is gonna be allocating our pooled investment over a more diversified array of securities in accordance with whatever the rules of the funds are allowing us to have more diversification with a mutual fund than possibly we could do by buying individual stocks and bonds. So then the question is, well, how can we then value our fund? In many ways, we can think of it as a similar thing as if we were trying to value stocks. Note that if we're investing, say in stocks, then stocks represent an ownership interest in a corporation. Corporations being separate legal entities having their ownership interests broken out into equivalent units, equivalent shares, equivalent stocks. Then we're typically thinking about those corporations traded on the stock exchange, publicly traded companies then, making them more accessible, more transparent in terms of their information. And if we were to buy the stocks, then we would have like an ownership interest in the corporation which we can value by then comparing it to the other like units or basically the same kind of quantitative units being sold and that will help us to value our shares. Now, when we talk about a mutual fund, now we have multiple assets that are being allocated to multiple different stocks and bonds and so on and so forth. But we can still kind of think of them as a value on like a per share type of basis, even though the fund is representing investments in multiple things such as multiple stocks and possibly bonds. So we could think of then, if we looked at the fund in terms of what they have and the liabilities, we'd say, well, their assets, if we look at their underlying assets, which if they're investing in publicly traded securities like stocks and if they're trading in bonds, then we can value what those are based on the market and we can determine in essence what their asset value is and they can report that to us. And then their liabilities representing what they owe and what are the obligations. That then the difference between the two, just like similar with a business and a business that would be equity here, we can think of it as the net assets would be the net value that we can allocate over and then we can allocate that over in essence the number of shares. And we can think of that in a similar fashion as we think of like the value of the stocks, what typically in relation or in general, what we might buy and sell the shares for, for example. So if I was to calculate that, we could say, okay, what's the net asset value per share? And let's then make this sell a little bit wider on column D, I'm gonna take column D and drag it to the right. And so let's just do our calculation. Let's make this a header thing here, let's not get ahead, don't get ahead of yourself. We're gonna select these two, we're gonna go up top home tab, thought group, bucket drop down and I'm gonna make that black and the lettering, I'm gonna make that white. That's what I typically do with the headers. You could do something different if you want, but that's what I'm doing here. We're gonna say this equals, I'm just gonna pull over the assets and then tab. I'm now in cell E2, I'm gonna do the same thing here. I'm gonna pull this from my data set. So if I wanted to change the data set, we can do so and run multiple problems with a similar set of facts. And then the liabilities, I'm just gonna say that equals the liabilities here. And then in E3, I'm gonna say this equals the liabilities here. Note that once we have this set up to begin with, I could have done this more easily. I could have said, well, let's delete this, delete this. Once I have this here, I could just drag this with the auto fill this way. And that's the relative cell reference here. I could select these two and put my cursor on the auto fill handle and drag it down. And the relative cell references should then be pulling on over. Pull it on over. Let's put an underline here. We're gonna go to the home tab, font group, let's put an underline, which is a line underneath the number, which you might suspect by the name. This is gonna be the net assets then. If you were valuing a company, this looks like the good old, the accounting equation here, right? Assets equal liabilities plus equity or assets minus liability equals equity. This time we're just gonna call it net assets. So if you took all the, if you were to liquidate, for example, and sell all the assets, you would think that you would get this 842,300,000. And then you subtract out the liabilities. That would be the assets that would be remaining liabilities being what is owed to a third party. The net assets then what goes to the owners, in our case, the people that hold on to the shares that represent the ownership of the investment. So we're gonna subtract this out. So there we've got 816,600,000. And we're then gonna say number of shares. Number of shares is gonna be equal to, the 35 million. And so then if I divide that out, we're gonna get our net asset value per share. And this is gonna be equal to the net assets of 816,600,000 divided by the 35 million. And let's add a couple of decimals here to make it a bit more exact. So I'm gonna go up top and go home tab, number group, couple of decimals. Let's put an underline here to make it look nice and neat font group underline. And then we can select this whole thing and go home tab and fonts group and hit the bucket dropdown. I'm gonna make it blue. That's what I usually do. But if you don't have that blue, you can go to the more colors right here and it's in the standard area on the wheel. And that's the one I typically use. Why I just do, I mean, you don't have to. You don't have to do it this way, although my way is usually the right way to do things. But this one time you could other ways might be equally correct. But in any case, there we have it. So in the bottom line is if you're investing in the mutual funds, you wanna have an idea of what you're investing in, being a mutual fund as opposed to the stocks. But you can imagine the mutual funds kind of valuing the underline values and then trying to break them down into a standardized unit of shares in a similar way as with the stocks. And that will typically be done at the end of the day, for example. And so that can help you to determine the price in a similar fashion as you might do with other kinds of investments, such as investments in the stocks.