Graham Number Calculator — Intrinsic Value Estimator
Benjamin Graham's number gives a conservative estimate of a stock's maximum fair price by combining earnings power (EPS) and asset value (Book Value Per Share). Enter both metrics — and optionally the current market price — to see the Graham Number and margin of safety.
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Maximum price Benjamin Graham considered fair: √(22.5 × EPS × BVPS)
- 1
Graham product
22.5 × 5 × 40 = 4,50022.5 = max P/E of 15 × max P/B of 1.5 — Graham's dual valuation constraint. - 2
Graham Number
√4,500 = 67.08
How does this calculator work?
Graham Number = √(22.5 × EPS × BVPS). If the current price is below this figure, the stock satisfies Benjamin Graham's maximum P/E (15) and P/B (1.5) conditions simultaneously. Enter trailing EPS and book value per share; add the market price to see the margin of safety and a buy/avoid signal.
Formula
How this is calculated
Benjamin Graham — the father of value investing — proposed a conservative rule of thumb in his classic books *Security Analysis* and *The Intelligent Investor*: a stock is fairly priced only if its P/E ratio is no more than 15 and its price-to-book (P/B) ratio is no more than 1.5. Multiplying those two limits gives 22.5, which is the constant in the formula. Taking the square root of (22.5 × EPS × BVPS) yields the maximum price that simultaneously satisfies both constraints — this is the Graham Number.
The calculator also computes the implied P/E and P/B ratios at the Graham Number (both are the geometric mean of their respective limits), and, when a current market price is entered, the margin of safety: the percentage gap between the Graham Number and the price. Graham advocated buying only when a meaningful margin of safety (often cited as 30–50%) existed, to provide a buffer against errors in the inputs.
Important limitations: the Graham Number assumes positive EPS and positive book value, works best for old-economy companies with stable earnings, and is inappropriate for high-growth tech or asset-light businesses where earnings and book value diverge widely from intrinsic value. It reflects publicly available 2025 financial figures you enter — always verify EPS and BVPS from the company's latest audited reports.
Frequently asked questions
If the Graham Number exceeds the current stock price, the stock satisfies Graham's dual P/E and P/B constraints and may be undervalued. A positive margin of safety is the cushion protecting against analytical errors. Graham typically looked for a 30–50% margin, i.e., the price at least 30–50% below the Graham Number.
No. The formula requires positive EPS and positive book value per share. Companies with negative earnings (losses) or negative book equity (common in financial firms, highly leveraged companies, or capital-light businesses) cannot be evaluated this way. Graham himself applied it primarily to industrials and consumer companies of the mid-20th century.
No — it is a conservative screening tool, not a full discounted cash-flow valuation. It provides a rough upper-bound on price given current earnings and book value, and is best used as a first filter to identify potentially undervalued stocks for deeper analysis, not as the sole basis for an investment decision.
Also known as
TG we-Calculate Editorial Team. (2026). Graham Number Calculator — Intrinsic Value Estimator [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/graham-number-calculator
TG we-Calculate Editorial Team. "Graham Number Calculator — Intrinsic Value Estimator." TG we-Calculate. 2026. https://we-calculate.com/calculator/graham-number-calculator.
TG we-Calculate Editorial Team, "Graham Number Calculator — Intrinsic Value Estimator," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/graham-number-calculator
@misc{wecalculate_graham_number_calculator, title = {Graham Number Calculator — Intrinsic Value Estimator}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/graham-number-calculator}}, year = {2026}, note = {TG we-Calculate} }
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