Tobin's Q

The formula for Tobin’s Q :

My Q here is that how this is true? total asset value is not debt and equity ??!!!

Uh, yeah it is…

ext{Assets} = ext{Liabilities} + ext{Capital}

oh my …


Perhaps OP’s view is that liabilities and debt aren’t the same thing (which is true).

However, CFA Institute takes a liberal view on this stuff, sometimes equating debt and liabilities.

All debts are liabilities , but some liabilities are “technically” not debt. Eg: unearned revenue , account payables.

These are most often relatively small. As S2000 suggests, the initial formula looks like a CFAI-approved approximation.

also, operating lease commitments…