Free · Equity ratios and valuation

Graham Number from Earnings & Book Value

Calculate the Graham-number screening formula from positive EPS and book value per share, then compare an entered market price.

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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Where results are editable, change one to solve backwards. Lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

EPS of 4 and book value per share of 10 give a Graham number of 30. Against a price of 25, the formula value is 20% higher.

Graham number = √(22.5 × EPS × book value per share); price gap = (Graham number / price − 1) × 100%

Worked example

Enter these known values and leave the other values blank.

Positive earnings per share
4 USD
Positive book value per share
10 USD
Entered share price
25 USD
Graham-number formula value
30 USD

Assumptions and limitations

  • The 22.5 coefficient is the product of screening multiples 15 and 1.5. This historical heuristic is not a discounted cash-flow estimate or a price target.
  • EPS, book value per share and current price must be positive. This screen is not applicable to a negative-earnings or negative-book-value case.
  • If using aggregate earnings and equity, use compatible share counts and adjust numerators for the share class being assessed.
  • Use consistent currencies, periods and amount scales. Currency selectors use fixed captured exchange rates, not current market rates.
  • Numerical comparison uses a tolerance, so extremely close prices and formula values can be treated as equal.

Common questions

Does a positive gap guarantee profit?

No. The calculation compares two numbers and does not predict future earnings or market prices.

Can I calculate per-share inputs from totals?

Yes. Enter positive shares and the corresponding equity or earnings numerator.

References

The calculation equations, inverse formulas, units, and input rules were imported from this source. Bookify provides the interface and equation solver.

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