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The problem with Q ratio is it relies on hard assets. The reality is, much of the US industry isn't dependent on hard assets and is instead based on the value o
by fweespeech 11y ago
The problem with Q ratio is it relies on hard assets. The reality is, much of the US industry isn't dependent on hard assets and is instead based on the value of the software that runs on those assets.
http://en.wikipedia.org/wiki/Tobin%27s_q http://en.wikipedia.org/wiki/Tobin%27s_q
This is an economic theory that was first published 1968/1969. It was a good model when Tech/IT wasn't a huge sector of the economy in its own right.
- seanalltogether 11y agoCustomers are probably one of the highest rated "assets" of any company nowadays. So much of the expenses of the company go into acquiring them.
- fweespeech 11y agoYes. But my understanding of the Q ratio is it takes into account on-paper assets, not the cost of "acquiring" customers or knowledge to produce R&D type "assets".