where 
according to benjamin graham the current price should not be more than 1 1 2 times the book value last reported however a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets as a rule of thumb the product of the multiplier times the ratio of price to book value should not exceed 22 5 example of the graham numberfor example if the earning per share for a single share of company abc is 1 50 the book value per share is 10 the graham number would be 18 37 22 5 1 5 10 1 2 18 37 again 18 37 is the maximum price an investor should pay for a share of abc according to graham if abc is priced at 16 it is attractive if priced at 19 it should be avoided limitations of the graham numberthe calculation for the graham number does leave out many fundamental characteristics which are considered to comprise a good investment such as management quality major shareholders industry characteristics and the competitive landscape with regard to stocks and equity instruments fundamental analysis is a method of determining the value that focuses on key metrics and economic indicators such as revenues earnings where an industry is in its cycle return on equity roe and profit margins fundamental analysis relies on a company s financial statements one of the most famous and successful fundamental analysts warren buffett aka the oracle of omaha is famous for successfully employing fundamental analysis warren buffett was both a student and employee of benjamin graham the fundamental method of security analysis is considered to be the opposite of technical analysis 