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Analysis

Graham number and margin of safety calculator

See Graham's rule of thumb figure and how far the price is from it.

Your figures

PKR

In rupees. It must be above 0.

PKR

In rupees. It must be above 0.

PKR

In rupees.

Digit grouping

This shows example figures. Change them to work out your own.

Result

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Graham number

PKR 318.20

Margin of safety
21.43%

How it is calculated

Graham number = the square root of (22.5 x earnings per share x book value per share).

Margin of safety = (Graham number - price) / Graham number. It is negative when the price is above the Graham number.

The root is worked out exactly and rounded to the paisa once.

Assumptions

  • It is one old rule of thumb, written for a particular kind of investor, and not a measure of what a share is worth.
  • It needs earnings and book value above 0.
  • It does not say whether to own a share. Companies and industries differ.

Results are worked out from the figures you enter and are only estimates. They are not advice.

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