About this calculator
This calculator is for education only and does not constitute investment advice. The Graham Number is Benjamin Graham's defensive-investor shortcut from The Intelligent Investor: the square root of 22.5 × EPS × book value per share, where 22.5 is 15 (the highest P/E Graham would pay) times 1.5 (the highest price-to-book he would pay). A price below the Graham Number passes the screen; a price above it fails it — and that is all it means.
It is not a guarantee of intrinsic value, and it is not a buy signal. Past returns do not guarantee future results, and a stock can pass Graham's screen and still fall: earnings can collapse, book value can prove overstated, and the market can stay uninterested for years. The net-net screen below it is stricter — price below net current asset value per share — and rarer still in modern markets. Read both screens together with the limits in the FAQ before drawing any conclusion.
How to use it
- Enter earnings per share and book value per share, both positive — the calculator refuses anything else, because the formula is undefined otherwise.
- Enter the current share price yourself; no live price is fetched.
- Enter current assets, total liabilities and shares outstanding for the NCAV screen, all on the same reporting basis.
- Read the Graham Number against the price, then the NCAV per share against the price, then the table: if a 20% earnings miss flips the verdict, the verdict was never strong.
The formula
The 22.5 is not a fitted constant: it is Graham's two ceilings multiplied together, 15 × 1.5. The square root blends the earnings view and the asset view so that neither alone can carry the result — a company must look reasonable on both. NCAV uses total liabilities, not just current liabilities: Graham's net-net test asked what remains for shareholders after every liability is paid, counting only current assets because only they could plausibly be liquidated near book value. Neither screen adjusts for growth, intangibles, debt quality or business quality, which is why both are screens, not valuations.
Worked example
EPS $4.00, book value per share $30.00, current price $50.00: the Graham Number is √(22.5 × 4 × 30) = √2700 = $51.96, which is 3.92% above the $50 price — the stock passes the screen, narrowly. On the balance sheet, current assets $500M minus total liabilities $300M give NCAV of $200M, or $20.00 per share on 10M shares — 60.00% below the price, so the stock fails the far stricter net-net screen. Passing one screen and failing the other is the normal outcome, not a contradiction.
Sources: The Intelligent Investor (Graham, revised edition 1973): 22.5 = 15 (maximum P/E) × 1.5 (maximum price-to-book); Security Analysis net-net method: NCAV = current assets − total liabilities. No live prices are fetched; all inputs are entered by the user. Last updated: October 2026.
Frequently asked questions
Why does the calculator refuse negative EPS or negative book value?
Because the formula breaks: the square root of a negative product is not a price, and a negative book value means liabilities already exceed assets. Graham designed the screen for profitable companies with positive net worth. A loss-making company is not a "Graham Number of zero" — it is outside the screen entirely, and forcing a number would be false precision.
Does the Graham Number work for banks and insurers?
Poorly, and Graham would have said so. For financial companies, book value is the business itself and loan-book quality matters more than the book figure; current assets and total liabilities do not separate the way they do for an industrial company. The NCAV screen is likewise unreliable for financials. Use sector-appropriate methods instead.
What about fast-growing or asset-light companies?
The screen understates them by design: it caps the P/E at 15 and leans on book value, which misses intangibles like brands, software and network effects that never sit on the balance sheet. A great compounder routinely fails Graham's screen. That is a limitation of the screen, not proof the stock is overpriced.
Is price below the Graham Number a buy signal?
No. It is a first filter that says "worth a closer look, at a defensive price." Graham's own process continued with earnings stability over ten years, dividend history, debt levels and business quality — none of which this page measures. Past returns do not guarantee future results, and a passing screen is not investment advice.
What formula does this graham number calculator use?
Graham Number = √(22.5 × EPS × BVPS); NCAV = current assets − total liabilities; NCAV per share = NCAV / shares outstanding The 22.5 is not a fitted constant: it is Graham's two ceilings multiplied together, 15 × 1.5. The square root blends the earnings view and the asset view so that neither alone can carry the result — a company must look reasonable on both. NCAV uses total liabilities, not just current liabilities: Graham's net-net test asked what remains for shareholders after every liability is paid, counting only current assets because only they could plausibly be liquidated near book value. Neither screen adjusts for growth, intangibles, debt quality or business quality, which is why both are screens, not valuations. The worked example on this page applies the formula step by step with real numbers, so you can verify the result by hand.