when calculated for the entire stock market the q ratio shows whether the aggregate market is relatively over or under valued 
the bottom linetobin s q ratio measures the relationship between a company s market price and the cost of its assets a high q ratio means that a company s stock price is well above the value of its assets and that company may be overvalued a low q ratio means that the company may be undervalued when calculated for the market as a whole the q ratio may indicate that the market itself is overvalued or undervalued 