Graham Number Calculator
How to Use the Graham Number Calculator
Enter earnings per share and book value per share. The calculator applies the classic Graham Number formula, square root of 22.5 × EPS × BVPS, to estimate a conservative valuation reference.
Practical Example
With EPS of 5 and book value per share of 30, the Graham Number is about 58.09.
Factors That Affect the Result
The estimate depends on reported earnings and book value, both of which can change with business performance and accounting choices. It is a screening metric, not a complete valuation model.
Frequently Asked Questions
What does the Graham Number represent?
It is a value-investing reference that combines earnings and book value.
Can the Graham Number be used when EPS is negative?
No. The traditional formula requires positive EPS and book value per share.
Is a stock automatically cheap below the Graham Number?
No. Investors should also consider growth, debt, cash flow and business quality.
Methodology and Practical Limits
The Graham Number is a historical valuation heuristic based on earnings per share and book value per share. It is not a universal fair-value model and can be less informative for firms with negative earnings, unusual asset structures or business models where book value has limited relevance.