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Calculating NAV?
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Helion Exus
Saitek Enterprises
#1 - 2013-07-30 11:05:22 UTC  |  Edited by: Helion Exus
Okay, so I have a bit of a dilemma. I cannot seem to accurately calculate my NAV on a daily/weekly basis to track profit. I manufacture items and then sell them, so my assets are my liquid ISK my POS, Fuel, Minerals, Materials, Blueprints, Stuff in the oven, Stock, buy orders and sell orders.

To get a broad representation of my, my Blueprints are valued at NPC price, with my POS being valued at lowest sell order in my hub. ISK is ISK, so it's fine. Fuel I tend to completely discount as it's a consumable.

Materials and Minerals I value at highest buy order in my hub, minus 10% to try to take account of market depreciation. Stock and stuff i'm making I take as lowest sell order minus 10%. Sell orders get a 10% reduction as well. Buy orders I assume will cost me 10% more than the current full escrow amount.

Does this seem like a reasonable way to go about calculating my NAV? This issue I have is this produces daily fluctuations that can be somewhat significant. Everything is automated in my calc, so it reads in EVE Central for prices, and the API for industry jobs, stock, ISK and orders.
Vera Algaert
Republic University
Minmatar Republic
#2 - 2013-07-30 11:48:38 UTC
Yo can calculate it however you want - there are no generally accepted accounting practices in EVE when it comes to the valuation of raw materials and stock. Your approach sounds sensible and conservative.

I would leave the fluctuations as they are as there can be "real" rapid changes in the prices of items and any attempt at smoothing/filtering your price data risks hiding these until it is too late.

However, it can't hurt to also look at e.g. a floating average of your NAV over a few days if you want to get a feeling for how you are doing on a longer term.

.
mechtech
Ice Liberation Army
#3 - 2013-07-30 12:50:26 UTC
IMO I think it's best to calculate NAV on the current prices of the assets (but prices that would move the items quickly).

Adding a 10% hit to mineral prices isn't really necessary, unless you have many hundreds of billions in minerals that would actually change the market price upon sale.

NAV will indeed have daily fluctuations, there's nothing wrong with that. Just put a line of best fit through it on Excel if you want to see a cleaner trend...
Akita T
Caldari Navy Volunteer Task Force
#4 - 2013-07-30 18:17:11 UTC
Quick and dirty but sufficiently ok way to do it ?
I'd say just use daily median values for everything.
That most realistically represents the likely price you might be getting .
But that's just my personal preference.

No matter what you pick, as long as you stick with the exact same method for each and every resource and item, you're good to go.
DO NOT switch from lowest sell for one type, highest buy for another type, and ffs don't apply such huge flat discounts (i.e. the -10% you were talking about) to anything.

And don't forget to also include items still in manufacture pipelines.
Forgetting to include that would lead to pretty heavy NAV fluctuations.

Akita T evewiki profile | | | Build your own EVE-ready PC
Helion Exus
Saitek Enterprises
#5 - 2013-07-31 08:37:21 UTC
Hmm, never really considered daily median. I stuck with highest buy order in case there was an "oh ****" moment and I needed to liquidate.

I am consistent across items, and do consider the items currently being manufactured (from the Industry Jobs API).

Regarding the discounts, I agree that 10% may be too high, but some of the markets i'm involved in do fluctuate by +/- 10% on a daily basis, depending on the intelligence of the competition. I guess I could apply no discount, and it would provide a true snapshot of my NAV. If only I could automate the process to pull down the numbers hourly, then I could calculate my personal daily median.

I think i'll stick with what I have for now, and just monitor the outputs for a month or so - see how consistent they are. Just as an example, my NAV increased by 400M yesterday for no good reason other than something in my calculation (couldn't trace it fully). Not boasting in the slightest, just concerned that this is a relatively significant fluctuation given I am still <15B in NAV.
Jdestars
Stars Research systems Incorporation
#6 - 2013-07-31 13:26:17 UTC  |  Edited by: Jdestars
with the Eve system export its hard to refrech a price with +500 material in input ,
hard to evaluate the cost of price item its the value of your Stockpils mineral , fuel ....

you can choise to index it evaluation market price but its It is not the same thing as the Cost acquisition reality of components necessary for the production stock often acquired in the course of few months or years

in my case my calculation are based of max prod blueprint in month and i buy the necessary componant for this range

Thus little stock but a big sensibility in the volatililty of the market

how evalutate cost of buy item necessary : median give some information but its not the prices that you pay finaly ( depend of item necessary vs avalaiblee item in sell order book of your market


for Pos an other value are necessary : The cost bound to the amortization and the renewal of infrastructures ( wars and other troubleshooting)


nota :The calculation of the median and the average is not sufficient(self-important);
And moreover of which average? Arithmetical, geometrical, Quadratique ,harmonious, balanced or not Avearge for the newsbee beeeezzzBlink
Hoo Yodaad
Viziam
Amarr Empire
#7 - 2013-07-31 15:28:34 UTC
Akita T wrote:
No matter what you pick, as long as you stick with the exact same method for each and every resource and item, you're good to go.
DO NOT switch from lowest sell for one type, highest buy for another type,


If you're looking for a conservative estimate, assume all of your assets are valued by the highest buy order (this is what I do). That's essentially your quickest route to convert your assets to cash whether it's a raw material or a finished product.

Akita T wrote:
ffs don't apply such huge flat discounts (i.e. the -10% you were talking about) to anything.



I second this... if you artificially decrease your estimated value, you are basically making the assumption that everything is going to lose value for some reason. Besides, your balance sheet is really benchmarking tool so there's no reason to do it. Find the value and use that, don't overcomplicate it, and be consistent.
Helion Exus
Saitek Enterprises
#8 - 2013-07-31 16:05:32 UTC
Yeah, I think i'm going to remove my discounting, at least for material sand minerals. I just suddenly realised why it didn't look like I was making more profit the more ISK I invested....

If I had 10B liquid and no material stock, my NAV would be 10B. If I invested 5B in minerals my NAV would actually drop to 9.5B due to discounting. Definitely not a great idea!

My concern is that if i'm talking stock (mods, ships) it may be appropriate to discount what I hold to assume for a drop in value before reaching market. It may also be appropriate to assume I have to reduce the price of items already on the market to be competitive, and similarly put up more ISK for buy orders. What percentage, I don't know.
Sabriz Adoudel
Move along there is nothing here
#9 - 2013-08-01 01:12:39 UTC
Hoo Yodaad wrote:
Akita T wrote:
No matter what you pick, as long as you stick with the exact same method for each and every resource and item, you're good to go.
DO NOT switch from lowest sell for one type, highest buy for another type,


If you're looking for a conservative estimate, assume all of your assets are valued by the highest buy order (this is what I do). That's essentially your quickest route to convert your assets to cash whether it's a raw material or a finished product.

Akita T wrote:
ffs don't apply such huge flat discounts (i.e. the -10% you were talking about) to anything.



I second this... if you artificially decrease your estimated value, you are basically making the assumption that everything is going to lose value for some reason. Besides, your balance sheet is really benchmarking tool so there's no reason to do it. Find the value and use that, don't overcomplicate it, and be consistent.




Don't go by the highest buy order. Go buy the highest buy order that can cover your stock (or at least a large majority of it).

e.g. if you have 1570m units of Pyerite, and your local market has a buy order for 140m units at 12.25isk and 1670m units at 11.93isk, value your Pyerite supply at 1570m x 11.93 and don't forget to take off 0.75-0.9% (as appropriate) for sales tax.

Be careful also that you aren't looking at your own buy order.

As for fluctuations - try to understand why they are happening. Sometimes they are temporary (e.g. the drop in price meta 4 warp scramblers often undergo Tuesday to Friday) and sometimes they are longer term (e.g. the crash in decryptor prices and the corresponding crash in 2m+ ISK tech 2 modules post Odyssey). I got caught out somewhat on the latter and had to liquidate almost 1.5 billion in tech 2 modules (1600mm plates and neutron blaster cannons mostly) to buy orders at a 15-20% loss, had I held them longer I would have lost 35% or more.

I support the New Order and CODE. alliance. www.minerbumping.com
Tauranon
Weeesearch
CAStabouts
#10 - 2013-08-01 01:54:18 UTC
Helion Exus wrote:
Yeah, I think i'm going to remove my discounting, at least for material sand minerals. I just suddenly realised why it didn't look like I was making more profit the more ISK I invested....

If I had 10B liquid and no material stock, my NAV would be 10B. If I invested 5B in minerals my NAV would actually drop to 9.5B due to discounting. Definitely not a great idea!

My concern is that if i'm talking stock (mods, ships) it may be appropriate to discount what I hold to assume for a drop in value before reaching market. It may also be appropriate to assume I have to reduce the price of items already on the market to be competitive, and similarly put up more ISK for buy orders. What percentage, I don't know.


I use the middle of the spread for both mins and items when making build choices. When the buy orders complete for minerals, I'd usually show an increase in NAV which reflects the part of my profit that is derived from purchasing practices. its technically not worth building unless the basket spread is tighter or offset below the object spread.
SJ Astralana
Syncore
#11 - 2013-08-01 07:59:52 UTC
I like the median price mentioned earlier, that has merit.

Fluctuations can come from things that may hide from you such as items on contract. If you have large stocks, highest buy/lowest sell will bounce you around even on a weekly basis. For my materials I use a rolling 30-day weighted average of actual costs, but I don't for my produced items. I get enough 'noise' in daily NAV calculations where it's difficult to get a true picture, but on a monthly basis it's better. Also, often your NAV may flatten or decrease between patches even though your true value is going up, as you may have a smaller number but your overall purchasing power has increased. There's merit in dividing your NAV by a basket to derive an index over time.

Hyperdrive your production business: Eve Production Manager

Helion Exus
Saitek Enterprises
#12 - 2013-08-01 11:10:48 UTC
Lots of interesting ideas in this thread. It's given me plenty to think about. One thing's for sure, I need to record certain things on a more frequent basis!