Graham Number Calculator
Calculate the Graham Number from earnings per share and book value per share as a historical screening heuristic.
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Understand this calculation
The Graham Number is a historical Benjamin Graham-style heuristic combining earnings and book value into a single screening figure.
Formula
Worked example
With $6 EPS and $20 book value per share, the Graham Number is approximately $51.96.
How to interpret the result
The Graham Number is best treated as a historical screening reference, not as a universal fair-value formula.
Assumptions & limitations
EPS and book value per share must both be positive. The constant 22.5 reflects Graham-era valuation assumptions and may not suit every company or market environment.
Practical context
When this calculator is useful
The Graham Number is useful as a historical screening reference that combines positive earnings and book value per share. It reflects a conservative value-investing framework rather than a modern comprehensive valuation model.
How investors commonly use it
Investors interested in Benjamin Graham-style analysis may compare the calculated number with the market price as an initial screen before examining business quality, balance-sheet strength and normalized earnings.
What this metric does not tell you
The formula was developed for a different market era and is poorly suited to many asset-light, high-growth or intangible-intensive businesses. It should not be treated as a universal intrinsic value or automatic buy threshold.