Methodology

1. Graham Number

√(22.5 × EPS × Book Value Per Share)

A conservative floor value combining trailing earnings and book value. The constant 22.5 caps Graham's preferred maximums of P/E ≤ 15 and P/B ≤ 1.5 multiplied together.

2. Graham 1962 Formula

EPS × (8.5 + 2g)

Values a stock from current earnings plus an estimate of future growth (g, as a whole number percentage). 8.5 is Graham's assumed fair P/E for a no-growth company.

3. Graham 1974 Formula

1962 value × (4.4 / current AAA corporate bond yield)

Graham's own later revision, adjusting the 1962 estimate for a higher interest-rate environment than the one it was originally calibrated to.

4. Earnings Power Value (EPV)

Two versions, both shown and labeled:

• Version A (EPS ÷ WACC):labeled “non-Graham” in the app — Graham's own methods were pure arithmetic with no discounting; a required-return input (WACC) is a modern addition he never used.
• Version B (average 7-year EPS ÷ AAA bond yield):Bruce Greenwald's textbook formulation, closer to Graham's original “earning power” concept.

5. Net-Net / NCAV

(Current Assets − Total Liabilities) ÷ Shares Outstanding

What's left for shareholders if the company liquidated today — Graham's deepest bargain test. Flagged as a classic buy signal when price is below 67% of NCAV per share. Genuine net-nets are rare outside of small caps and market bottoms.

PEG Ratio (Lynch)

P/E ÷ Annual EPS Growth Rate (%)

Peter Lynch's growth-adjusted valuation check from One Up on Wall Street. Below 1.0 reads as potentially undervalued relative to its own growth; above 2.0 as expensive. A ratio, not a dollar value.

Owner Earnings price ceiling (Buffett)

Net Income + D&A − CapEx − Change in Working Capital

From Warren Buffett's 1986 Berkshire Hathaway shareholder letter, shown as a rough ~10x price ceiling. Total capital expenditure is used as a stand-in for “maintenance” capex (the two aren't separately reported), which tends to understate owner earnings for capital-light, fast-growing companies. A single year's working-capital swing can also move this figure more than the underlying business really changed.

DCF intrinsic value (Damodaran, simplified)

FCFF × (1 + g) / (WACC − g)

A single-stage Gordon Growth discounted cash flow, simplified from Aswath Damodaran's actual multi-stage methodology (high growth fading to a stable terminal rate). Numerically unstable when WACC is close to the growth rate, so the app won't compute it when the spread is under one percentage point. Free cash flow is also unreliable for banks and other financial institutions, whose deposit- and loan-driven cash flow doesn't map onto this formula.

Market-implied growth rate (reverse DCF)

The same Gordon Growth formula above, solved for the growth rate the current price already implies, shown next to the app's own growth estimate for comparison. An implausibly high implied growth rate is itself the signal — “the market is pricing in unsustainable growth” — so it's not suppressed the way the forward DCF is.

Acquirer's Multiple (Carlisle)

Enterprise Value ÷ Operating Income

Tobias Carlisle's deep-value screen from The Acquirer's Multiple. Uses operating income as reported rather than an “adjusted EBITDA” figure, on Carlisle's own stated reasoning that companies use adjustments to flatter results. Also ranked across the full Screener universe (lower is cheaper).

Price vs. 15× EPS (Lynch)

A historical chart plotting price against 15 times trailing EPS — Peter Lynch's own stated fair-value P/E — as a companion to the PEG ratio above.

ROIC / ROCE / CROIC

Three capital-efficiency ratios (return on invested capital, return on capital employed, and cash return on invested capital). ROIC here uses net income rather than after-tax operating income (NOPAT) — the simpler, more common practitioner version.

Warning Signs panel

An automated red-flag checklist, separate from the Defensive Investor screen's pass/fail bar. Eight checks: negative free cash flow, negative net income, EPS decline over 3 years, revenue decline over 3 years, book value per share decline over 3 years, any dividend cut in the recent window, negative Buffett owner earnings, and total debt exceeding book equity. This is deliberately not exhaustive — share dilution, auditor changes, and insider selling are real red flags this panel does not currently check.

Piotroski F-Score

A 9-point quality checklist (Joseph Piotroski, 2000) comparing this year against last on profitability, leverage/liquidity, and operating efficiency. Shown on the Screener.

Altman Z-Score

Edward Altman's 1968 bankruptcy-risk model, combining five balance-sheet and income-statement ratios into one number: above 2.99 reads as safe, 1.81–2.99 a gray zone, below 1.81 distress risk. Reads artificially low for banks and insurers, whose deposits and policy liabilities don't fit the model's assumptions — Altman himself published separate variants for non-manufacturers for this reason.

Beneish M-Score

Messod Beneish's earnings-manipulation probability model (1999), combining eight year-over-year financial ratios into one score. Above -1.78 (Beneish's own threshold) reads as an elevated red flag. Excluded for Financial Services tickers, whose balance-sheet structure produces false positives in several of the underlying ratios.

Greenblatt's Magic Formula

Joel Greenblatt's The Little Book That Beats the Market ranking: every eligible ticker is ranked by earnings yield and separately by return on capital, the two ranks are summed, and the universe is sorted ascending — #1 is the best combination of cheap and good. Excludes Financial Services and Utilities sectors, whose balance-sheet structure distorts the underlying ratios.