Basic information on financial databases: cook books, tips and tricks & economic news

This blog contains schematic easy to grasp - hands on - help in performing searches in economic databases, making work sets and making them inter-exchangeable between the databases.

* Disclaimer. I am not a finance professional. Most posts are the result of personal findings.

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5/15/2013

Tobin's Q Ratio. What is and where can I find it?

Tobin's Q Ratio provides information on how well a company's investments pay off.
This post focuses on  databases and the availability of the ratio or its components.

Tobin's Q

Market value of assets / replacement value of assets = TQ
or
(Equity Market value + liabilities market value) / (equity book value + liabilities book value) = TQ


On macroeconomic level:
Value of stock market / corporate net worth = TQ

Values larger than 1 say investments have been good.

Datastream:
Datatypes in red can be downloaded (In short: you can calculate the Tobin's Q ratio yourself.)

In Datastream it can be downloaded directly using the following formula
DPL#((X(WC08001) + X(WC03351)) / (X(WC03501) + X(WC03351)),6)

Put this rule in the data types field.
X stands for the selected equity or equities

The WC datatypes are datatypes from the balance sheet (provided by World Scope)
According to the formula liabilities book value and liabilities market value are the same (WC03351) = Total liabillities
 

Datatypes involved:

WC08001 = market capitalization (annual);  
MV = market value
WC03351 = total liabilities
WC03501 = common stock

Datastream output:











Tobin's Q can be calculated from the downloaded data.


Using the formula:
DPL#((H:AH(WC08001)+H:AH(WC03351))/(H:AH(WC03501)+H:AH(WC03351)),6)














 Also see: Ratios, values and other instruments from the balance sheet: Datastream


Compustat
Datatypes in red can be downloaded

Market value = MKVALT (North America database)
Calculation: stock price x number of shares  (Global database)

Liabilities: LT*
Market value = stock price x number of shares = MKVALT (North America)
Equity book value = Book value per share BKVLPS  (North America)
Liabilities book value = Liabilities market value = LT


!! Unfortunately these data can not be downloaded in the Global database !!

Formula North America:
(MKVALT + LT) / (BKVLPS + LT)

Output Microsoft











*) LT
This item represents current liabilities plus long-term debt plus other noncurrent liabilities, including deferred taxes and investment tax credit.
This item is a component of Assets ? Total/Liabilities and Shareholders' Equity ? Total (LSE).
This item is the sum of:
  1. Current Liabilities ? Total (LCT)
  2. Deferred Taxes and Investment Tax Credit (TXDITC)
  3. Liabilities ? Other (LO)
  4. Long-Term Debt ? Total (DLTT) 
 Also see
Ratio's, values and other instruments from the balance sheet: Compustat

Amadeus (Bureau van Dijk). (focus on Europe; no banks no financials)


Market value of assets / replacement value of assets = TQ
or
(Equity Market value + liabilities market value) / (equity book value + liabilities book value) = TQ

Total liabilities = Assets - shareholders equity (book value per share x number of shares) = total liabilities
Equity book value: Total Assets - (total) liabilities = shareholders'equity (book value of equity)

Book value per share = Book value per equity / number of shares outstanding

Market value: stock price x number of shares
Amadeus only weekly, monthly and annually

            ( (stock price x number of shares) + (total assets - shareholder equity) )
___________________________________________________________________________   = TQ

( (book value per share x number of shares outstanding) + (total assets - shareholder equity) )

Also see: Ratios, values and other instruments from the balance sheet: Amadeus

Bankscope (Bureau van Dijk) Focus ob public banks
Search criteria in this example: active, listed, public, commercial banks from Neth, Ger and US

Market value of assets / replacement value of assets = TQ
or
(Equity Market value + liabilities market value) / (equity book value + liabilities book value) = TQ

Number of shares
Book value per share
Total assets
Stock price only weekly, monthy, annually
Market value: stock price x number of shares
Total liabilities = assets - book value per share
Total liabilities = Assets - shareholders equity (book value per share x number of shares) = total liabilities
Equity book value: Total Assets - (total) liabilities = shareholders'equity (book value of equity)

Book value per share = Book value per equity / number of shares outstanding

Tobin's Q:
                 ( (stock price x number of shares) + (assets - book  value per share) )
____________________________________________________________________________


( (book value per share x number of shares outstanding) + (total assets - shareholder equity) )


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