# Graham Number Calculator

URL: https://speedycalculator.com/calculators/finance/graham-number/
Last updated: 2026-10-25

> The Graham number calculator estimates the maximum fair price for a defensive stock using Benjamin Graham's formula – the square root of 22.5 times EPS times book value per share – and tells you if the stock looks underpriced.

## Inputs

- Earnings per share (TTM)
- Book value per share
- Current share price

## Results

- Graham number
- Price vs Graham number
- Verdict

## Formula

```
Graham number = √(22.5 × EPS × book value per share)
22.5 = maximum P/E of 15 × maximum P/B of 1.5
```

## Explanation

Benjamin Graham, Warren Buffett's mentor, suggested a defensive investor should pay no more than 15 times earnings and 1.5 times book value. The Graham number combines both limits. It doesn't work for loss-making companies or those with negative book value.

### How to use the Graham Number Calculator

- **Earnings per share (TTM)**
- **Book value per share**
- **Current share price**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter EPS and book value per share (or the totals to derive them), and the current share price.

### Tips

- Take figures from the same financial statements and the same fiscal year.
- Compare ratios with companies in the same industry, not across industries.
- Use several valuation measures together; no single ratio tells the whole story.
- Market prices change every second – refresh the share price before you rely on a result.

### Common mistakes to avoid

- Mixing per-share figures with company totals.
- Using trailing earnings for one company and forward earnings for another.
- Forgetting dilution from options and convertible securities.

### Inputs explained

FieldWhat to enterEarnings per share (TTM)Amount in your currencyBook value per shareAmount in your currencyCurrent share priceAmount in your currency

### Example values

How the main result changes when **Earnings per share** changes and everything else stays at the example values above:

Earnings per share (TTM)Graham number2.2538.973.3847.734.555.115.6361.626.7567.5977.94

## Worked example

Inputs — Earnings per share (TTM): $4.5; Book value per share: $30; Current share price: $52.

Results — **Graham number = $55.11**; Price vs Graham number = -5.65 %; Verdict = Underpriced by Graham's test.

## FAQ

**What is the Graham number?**
√(22.5 × EPS × BVPS), a ceiling on a defensive stock's fair price.

**Where does 22.5 come from?**
15 (max P/E) × 1.5 (max P/B).

**Does it work for growth stocks?**
Not well – it ignores growth, so most tech stocks look overpriced.

**What formula does the Graham Number Calculator use?**
Graham number = √(22.5 × EPS × book value per share).