Hive Calculator Calculator

Graham Number Calculator

Compute the Graham Number using Benjamin Graham’s formula √(22.5 × EPS × BVPS).

Graham Number Calculator

Value investing has always been about finding undervalued companies and buying them at the right price. One of the most respected valuation methods in this field is the Graham Number, created by Benjamin Graham — the “father of value investing” and mentor to Warren Buffett.

The Graham Number Calculator helps investors determine the maximum fair price they should pay for a stock based on its earnings per share (EPS) and book value per share (BVPS). This conservative approach ensures that you don’t overpay for stocks, keeping your investments safe while maintaining long-term profitability.

🔎 What is the Graham Number?

The Graham Number represents the intrinsic value of a stock. It combines a company’s profitability (EPS) and financial stability (BVPS) to set an upper price limit for value investors.

👉 Formula for Graham Number:

Graham Number = √(22.5 × EPS × BVPS)

Where:
EPS = Earnings per Share
BVPS = Book Value per Share
Benjamin Graham used 22.5 as a conservative multiplier, assuming a fair PE ratio of 15 and a PB ratio of 1.5.

📚 Examples of Graham Number

Example 1

Earnings per Share (EPS) = $12
Book Value per Share (BVPS) = $25

Apply Formula:

Graham Number = √(22.5 × 12 × 25) = √6750 = 82.16

✅ Graham Number = $82.16
If the stock is currently trading at $75, it is undervalued and attractive for investors.

Example 2

Earnings per Share (EPS) = $50
Book Value per Share (BVPS) = $80

Apply Formula:

Graham Number = √(22.5 × 50 × 80) = √90,000 = 300

✅ Graham Number = $300
If the stock trades at $250, it is still below fair value, signaling a potentially safe investment.

Example 3

Earnings per Share (EPS) = $30
Book Value per Share (BVPS) = $15

Apply Formula:

Graham Number = √(22.5 × 30 × 15) = √10,125 = 100.62

✅ Graham Number = $100.62
If the stock trades at $120, it is overvalued compared to its Graham Number, which may suggest caution.

✨ Features of Our Graham Number Calculator

✅ Instantly calculates intrinsic stock value using Graham’s formula
✅ Easy-to-use, accurate, and quick results
✅ Works for large-cap, mid-cap, and small-cap stocks
✅ Mobile and desktop friendly for on-the-go investors
✅ 100% free and no registration required

👩‍💼 Who Should Use This Calculator?

Value Investors – To avoid overpaying for stocks.
Financial Analysts – To include conservative valuation in stock research.
Traders – To compare fair value with market price before buying.
Students & Educators – To learn practical applications of Benjamin Graham’s theories.

💡 Why the Graham Number Matters

Protects from overpaying: Provides a conservative upper limit.
Balances EPS & BVPS: Uses both profitability and asset strength.
Time-tested formula: Built on the principles of Benjamin Graham.
Ideal for long-term investors: Encourages safe, value-driven investing.

✅ With our Graham Number Calculator, you can quickly determine whether a stock is trading above or below its intrinsic value. This makes it easier to identify safe investments and avoid overpriced stocks.

👉 Try the Graham Number Calculator today on Hive Calculator and start investing the Benjamin Graham way – smart, safe, and value-driven.

Popular Calculators

Number Systems
Geometry
Volume
Finance
Converters
Related