Graham Number Calculator
Apply Benjamin Graham's formula in seconds: the conservative maximum price - free, with the √(22.5 · EPS · book value) formula and an example.
Also available in German: Graham-Formel Rechner (Graham-Zahl) →
Inputs
Earnings per share (EPS)
Also called: EPS, net income per share
Where to find it: Bottom of the income statement, or the key-stats box on finance portals.
How to derive: Net income ÷ shares outstanding.
Book value per share
Also called: BVPS, equity per share
Where to find it: Balance sheet: shareholder equity ÷ shares. Often listed directly as a stat.
How to derive: Shareholder equity ÷ shares outstanding.
Share price
Also called: Stock price, market price
Where to find it: Any finance site (Google/Yahoo Finance) — the current trading price per share.
How to derive: Set by the market; just enter the current price per share.
Result, live
Very conservative - built for value stocks, unsuitable for asset-light growth/tech.
The Graham number gives a conservative ceiling price a defensive investor should pay for a stock, following Benjamin Graham. It blends earnings and book value per share into a single price cap. Built for solid, asset-heavy value stocks.
How the formula works
The formula assumes two caps: a P/E of at most 15 and a price-to-book of at most 1.5. Their product (15 × 1.5 = 22.5) sits under the square root.
Example: $5 EPS and $40 book value per share: √(22.5 × 5 × 40) = √4,500 = $67. Above that the stock is deemed too expensive.
How to read the result
- Price below the Graham number: within the conservative range — a green light for value stocks.
- Well below it: a wider gap means a bigger margin of safety.
- Price above the Graham number: pricier than Graham's ceiling; the margin is gone.
What to watch out for
- Book-heavy firms only: for tech or brands with little book value the formula returns absurdly low numbers.
- Negative earnings or book value: the square root is then undefined and the number does not apply.
- Just a ceiling: it tells you the most you should pay, not the true value.
Frequently asked questions
Why exactly 22.5?
It is 15 × 1.5 — Graham's maximum P/E times his maximum price-to-book. Both are his rules of thumb for defensive stocks.
Why does the Graham number miss growth stocks?
It ignores growth and intangible assets. Companies with little book value but high earnings potential look overpriced when they may not be.
Where do I get EPS and book value?
From the earnings and balance sheet figures in the annual report. In our Fair Value Calculator they are already on file for 35,000+ stocks — no typing required.