Overview
Graham Number, reflects how the market prices the company relative to its financial performance. Quarterly (Q) scope increases short-term volatility visibility.
Formula
SQRT(22.5 * EPS * Book Value Per Share)
How to Interpret
High Value
If Graham Number remains in this band, the market may reprice risk/return assumptions.
Low Value
A low Graham Number band may require a more conservative capital allocation stance.
Where It Is Used
Interpreting Graham Number with company-specific distribution ranges is usually more stable than relying only on sector average.