When buying a company as an investor you take a risk. As a value investor, we try to mitigate these risks by understanding the underlying value of a company. If a company were to liquidate, their value in liquidation would be determined by their net tangible assets or their net asset value. By understanding the net tangible asset value, we can determine what our margin of safety is. If a company’s market capitalization is lower, then it’s net asset value it is trading at a discount. If a company’s net tangible assets are double the market capitalization of the company that means for every dollar of equity you buy you get $1.5 in assets. That represents a 50% return on capital. Therefore, Mazdarepresents an attractive investment at its current price. I will liquidate my position in this company after its market capitalization reaches its net asset value. At a 50% discount on tangible assets, I would be hard pressed to find a more attractive use of my capital.