How important is the q-ratio? I'll agree that if the company can be replaced at a lower cost then buying it's stock then it is likely over valued. I will also agree that if the price to earnings isn't so hot the Q-ratio is perhaps another good measure to look at. However, how tangible are the assets of a company. The company includes more then just buildings and machinery. It also includes, people, trade secretes, patents, work processes, brand value and business contacts. I'm sure some of these things are included in the value of the companies assets but recreating the company is not always an easy process. It requires a pool of labour which includes the right skills and expertise to draw from.