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Benjamin Graham's rough ceiling for a defensive investor's price is the square root of 22.5 times earnings per share times book value per share. The 22.5 comes from his limits of 15 times earnings and 1.5 times book combined.
Graham number
Graham number = √(22.5 × EPS × BVPS)
Figures are estimates for planning only. Market returns are not guaranteed, and rates, limits and tax rules change. This is not financial or tax advice — speak to a qualified adviser before acting.
It is 15 × 1.5 — Graham's maximum P/E multiplied by his maximum price-to-book.
Poorly for asset-light and high-growth firms, since it relies on book value and trailing earnings.