Graham Number Calculator
Find a stock's intrinsic value using Benjamin Graham's formula. Compare it to the current market price to spot undervalued opportunities.
Net profit divided by total shares outstanding
Total equity divided by total shares outstanding
For margin of safety calculation
Benjamin Graham's Formula
Graham Number = √(22.5 × EPS × BVPS)
22.5 = max P/E of 15 × max P/B of 1.5
Enter EPS and BVPS to calculate
Frequently Asked Questions
What is the Graham Number?
The Graham Number is a figure that measures a stock's fundamental value by combining its earnings per share (EPS) and book value per share (BVPS). Developed by Benjamin Graham, the "father of value investing," it represents the maximum price a defensive investor should pay for a stock.
What does 22.5 in the formula mean?
22.5 comes from Graham's rule that a stock's P/E ratio should not exceed 15 and its P/B ratio should not exceed 1.5. Multiplied together: 15 × 1.5 = 22.5. This ensures you're not overpaying relative to earnings or assets.
What is Margin of Safety?
Margin of Safety is the percentage discount between the Graham Number (intrinsic value) and the current market price. If the Graham Number is ₹500 and the stock trades at ₹400, the margin of safety is 20%. Graham recommended buying only when there's at least a 30–50% margin of safety.
Does the Graham Number work for all stocks?
The formula works best for stable, profitable companies. It is not suitable for loss-making companies (negative EPS), high-growth tech companies, or financial sector stocks. Use it as one input in a broader analysis.
Where do I find EPS and Book Value?
For Indian stocks, you can find EPS and Book Value Per Share on screener.in, tickertape.in, or moneycontrol.com. Use Trailing Twelve Months (TTM) EPS for the most current picture.