Enter the total earnings per share (EPS) and book value per share into the calculator to determine the Graham Number.

## Graham Number Formula

The following formula is used to calculate a Graham Number:

GN = SQRT ( 22.5 * EPS * BPS)

• Where GN is the Graham Number
• EPS is the earnings per share
• BPS is the book value per share

## What is the Graham Number?

A Graham Number is a metric used to evaluate the highest price an investor should pay for a stock. It’s calculated using the book value per share (BVPS) and the earnings per share (EPS) of a particular stock.

## Example Problem

How to calculate Graham Number?

First, determine the earnings per share. This is equal to the total earnings divided by the total amount of shares available. For this example problem, the earnings per share is found to be \$4.00.

Next, determine the book value per share. In this case, the book value per share is found to be \$3.50.

If you are unsure how to solve or calculate the EPS or BVPS, visit the calculators linked above.

Finally, calculate the Graham Number using the formula above:

GN = SQRT ( 22.5 * EPS * BPS)

GN = SQRT ( 22.5 * 4.00 * 3.50)

GN = 17.748