Compute Benjamin Graham’s √(22.5 × EPS × book) ceiling and the margin of safety versus the current price.
| Graham number | – |
| Margin of safety (%) | – |
Use this Graham-number calculator as a rule-of-thumb value ceiling, not a DCF. The 22.5 comes from Graham’s P/E of 15 times a P/B of 1.5. EPS and book must be positive.
Graham number = √(22.5 × EPS × book per share). Margin of safety % = 100 × (Graham − price) / Graham. A negative MOS means the quote is above the number.
EPS: Trailing or normalised earnings per share.
Book / share: Book value per share.
Price: Current market price.
Graham number: The rule-of-thumb ceiling.
Margin of safety (%): How far the price sits below (or above) that ceiling.
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