Have you ever wondered what the Graham Number of a company is? The Graham number, also known as Benjamin Graham's number, was developed by investor Benjamin Graham. It's simply an equation that helps investors determine if they're paying a fair price for a stock. By plugging numbers from a spreadsheet into this equation, investors can see what their position would be if they were purchasing shares at current prices.When buying a stock, it's important to look at the fundamentals of the company behind its projected earnings. The Graham Number is a way to determine how costly or rewarding that investment might be. It's measured by calculating how much your dollar will go toward buying back stock versus paying out in dividends and interest payments.The Graham number (or Benjamin Graham's number) measures a stock's fundamental value by taking into account the company's earnings per share (EPS) and book value per share (BVPS). It is often used to evaluate whether a company's shares are under- or overvalued.
