Total Q and Tobin’s Q

A new Compustat data source has become available to people who have access to Compustat databases through WRDS: Peters and Taylor Total Q. This new source provides data on firms’ “Total q” ratio and the replacement cost of firms’ intangible capital. Total q is an improved Tobin’s q proxy that includes intangible capital in the denominator, i.e., in the replacement cost of firms’ capital. Peters and Taylor estimate the replacement cost of firms’ intangible capital by accumulating past investments in R&D (Research and Development) and SG&A (Selling, General and Administrative Expenses). Background paper can be downloaded here.

Overview of the variables and names in the database:

datadate = Date
fyear = Fiscal Year
gvkey = GVKEY / Compustat unique company code
K_int = Firm’s intangible capital estimated replacement cost
K_int_Know = Firm’s knowledge capital replacement cost
K_int_offBS = Portion of K_int that doesn’t appear on firm’s balance sheet
K_int_Org = Firm’s organization capital replacement cost
q_tot = Total q


The database offers mainly data for companies which are included in the Compustat North America database. Most of these companies are American. The coverage is: 1950 – now.

Email

%d bloggers like this: