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ADVFN HomeHelpFinancialsDeeper AnalysisINVESTMENT RATIOS - Market Value AnalysisTobin's Q Ratio
INVESTMENT RATIOS - Market Value Analysis
  Price-Quality (PQ) Ratio
  Tobin's Q Ratio
  Tobin's Q Ratio (excl. intangibles)
  Dividend Yield
  Market-to-Book Ratio
  Price-to-Pre-Tax Profit PS
  Price-to-Retained Profit PS
  Price-to-Cash Flow PS
  Price-to-Sales PS
  Price-to-Net Tangible Asset Value PS
  Price-to-Cash PS
  Net Working Capital PS
  Price Pct to Working Capital
  Average PE
  Earnings Yield
  Years in Average
  PE to PE Average

Tobin's Q Ratio

Tobin's Q Ratio, is the market value of a company's assets divided by their replacement value. Replacement value being the current cost of replacing the firms assets. This ratio is named after Nobel Economics Laureate James Tobin of Yale University. He hypothesized that the combined market value of all the companies on the stock market should be about equal to their replacement costs. In other words, the ratio of all the combined stock market valuations to the combined replacement costs should be around one. The formula is the following:

market cap. / average total assets