Use the Graham Number Calculator to estimate an upper valuation benchmark for a stock based on its Earnings Per Share (EPS) and Book Value Per Share (BVPS).
Last updated on: Jul 15, 2026
A Graham Number Calculator is a valuation tool used to calculate the Graham Number, which estimates an upper valuation benchmark based on a company's earnings and book value.
The concept was introduced by Benjamin Graham, often regarded as the father of value investing. The Graham Number combines a company's profitability and net asset value into a single figure.
The calculation is based on two important financial metrics:
Earnings Per Share (EPS)
Book Value Per Share (BVPS)
The Graham Number helps investors:
Estimate a stock's theoretical value
Compare market price with calculated value
Analyse valuation metrics
Evaluate stocks using fundamental data
Apply value-investing principles
The calculator simplifies the process and provides quick results using publicly available financial information.
A Graham Number Calculator uses a mathematical formula that incorporates a company's earnings and book value.
The calculation process generally involves the following steps:
Entering Earnings Per Share (EPS)
Entering Book Value Per Share (BVPS)
Applying the Graham Number formula
Generating the calculated value
The calculator uses:
EPS: Represents the company's earnings attributable to each outstanding share.
BVPS: Represents the net asset value attributable to each share.
The output provides:
Estimated Graham Number
Theoretical valuation benchmark
The calculated figure can then be compared with the stock's current market price for analytical purposes.
Using a Graham Number Calculator is straightforward.
Follow these steps:
Obtain the company's Earnings Per Share (EPS)
Obtain the company's Book Value Per Share (BVPS)
Enter the EPS value into the calculator
Enter the BVPS value into the calculator
Click on the calculate option
Review the calculated Graham Number
The calculator will instantly display the estimated valuation figure based on the inputs provided.
Accurate financial data helps ensure meaningful results.
The Graham Number formula combines earnings and book value into a single valuation metric.
The formula is:
Graham Number = √(22.5 × EPS × BVPS)
Where:
EPS = Earnings Per Share
BVPS = Book Value Per Share
22.5 = A commonly used multiplier derived by combining Benjamin Graham's suggested maximum Price-to-Earnings (P/E) ratio of 15 and maximum Price-to-Book (P/B) ratio of 1.5
The number 22.5 comes from multiplying:
Maximum Price-to-Earnings (P/E) ratio of 15
Maximum Price-to-Book (P/B) ratio of 1.5
15 × 1.5 = 22.5
The formula provides an estimated upper valuation limit based on these assumptions.
The table below illustrates a sample Graham Number calculation.
| Particulars | Value |
|---|---|
Earnings Per Share (EPS) |
₹20 |
Book Value Per Share (BVPS) |
₹100 |
Constant Multiplier |
22.5 |
Calculation:
Graham Number = √(22.5 × 20 × 100)
= √45,000
= ₹212.13
| Metric | Value |
|---|---|
EPS |
₹20 |
BVPS |
₹100 |
Graham Number |
₹212.13 |
In this example, the calculated Graham Number is approximately ₹212.13 per share.
A Graham Number Calculator can simplify the valuation process by helping investors apply Benjamin Graham's valuation approach consistently.
The benefits include:
Simplifies Valuation Calculations: Automatically applies the Graham Number formula, eliminating the need for manual calculations and reducing complexity.
Combines Important Financial Metrics: Incorporates earnings per share and book value per share into a single valuation measure.
Provides a Quick Valuation Benchmark: Helps estimate a reference value that can be used for preliminary stock valuation analysis.
Supports Fundamental Analysis: Assists in evaluating stocks using financial fundamentals as part of a broader analysis.
Reduces Calculation Errors: Minimises the risk of mistakes that may occur when performing valuation calculations manually.
Saves Time During Research: Enables faster assessment of multiple companies by generating valuation estimates instantly.
Facilitates Company Comparisons: Allows consistent application of the same valuation framework across different companies and sectors.
The calculator provides a structured way to apply a widely recognised value-investing formula using publicly available financial information.
The calculator/formulas are for illustrative purposes only and does not constitute financial advice. Users are advised to consult professional advisors before making investment decisions.
Reviewer
Ans: The Graham Number formula is:
Graham Number = √(22.5 × EPS × BVPS)
It combines Earnings Per Share (EPS) and Book Value Per Share (BVPS) to estimate a theoretical valuation benchmark.
Ans: The Graham Number is commonly used as a valuation benchmark. Investors may compare a stock's market price with its calculated Graham Number as part of broader fundamental analysis.
Ans: A Graham Number calculator generally requires:
Earnings Per Share (EPS)
Book Value Per Share (BVPS)
These inputs are used to calculate the Graham Number.
Ans: The Graham Number continues to be referenced as a traditional valuation metric in value investing. However, it is often used alongside other financial ratios, valuation models, and company-specific analysis rather than as a standalone measure.