ValueROCE#27
Graham Net-Net Value is the metric used to how cheaply a stock trades relative to its fundamentals.
By Javier Sanz, Founder & Lead AnalystEditorially reviewed
Last updated: Reviewed by: Javier Sanz
Formula
EBIT / (Total Assets - Current Liabilities) x 100
Description
Measures how efficiently a company generates profits from all capital employed, including both debt and equity. Similar to ROIC but uses EBIT (before tax) rather than NOPAT. Popular in UK and European financial analysis.
Interpretation
Above 15% is generally good. ROCE above the company's borrowing rate creates value. Consistent improvement over time is a strong positive signal. Compare within industry, as capital intensity varies widely.
Related metrics: Price-to-Earnings Ratio TTM (P/E), Forward Price-to-Earnings (Forward P/E). (Updated 2026)
Further Reading
- SEC EDGAR primary filings on Graham Net-Net Value- Primary source filings used to calculate Graham Net-Net Value.
FAQ
How is Graham Net-Net Value calculated?+
Graham Net-Net Value uses the formula: EBIT / (Total Assets - Current Liabilities) x 100. compare against sector median on /screener with the Sector filter applied. ValueMarkers refreshes the calculation within 24 hours of each new SEC filing using SEC EDGAR 10-K filings + Damodaran NYU industry tables.
What is a good Graham Net-Net Value value by sector?+
There is no single 'good' value for Graham Net-Net Value — context is sector-driven. compare against sector median on /screener with the Sector filter applied. The /screener exposes sector-relative percentiles for Graham Net-Net Value on every ticker, so you can compare against the sector median rather than the broad-market median.
Which investors use Graham Net-Net Value?+
Warren Buffett, Benjamin Graham, Joel Greenblatt cite Graham Net-Net Value as a key input to to identify stocks trading below intrinsic value. The academic anchor is Graham (1934) and Damodaran (NYU Stern). ValueMarkers weights this within the Value pillar of the VMCI score (35% of total).
What are the limitations of Graham Net-Net Value?+
Graham Net-Net Value can mislead in value traps in declining industries. Pair Graham Net-Net Value with at least two cross-checks from other VMCI pillars — for example, free cash flow trend, balance-sheet quality, and earnings consistency — before drawing a single-metric conclusion.
Where can I see live Graham Net-Net Value data?+
Visit any /stock/[ticker] page on ValueMarkers to see live Graham Net-Net Value data, sector percentiles, and the VMCI composite score that integrates Graham Net-Net Value with 119 other indicators across 100,000+ stocks. The free /screener exposes Graham Net-Net Value as a filterable column.
Related Value Indicators
Price-to-Earnings Ratio TTM (P/E)P/E
P/E measures how cheaply a stock trades relative to its fundamentals. Value investors to identify stocks trading below intrinsic value when P/E aligns with the rest of the VMCI 120-indicator comp.
Forward Price-to-Earnings (Forward P/E)
Forward Price-to-Earnings captures how cheaply a stock trades relative to its fundamentals.
Price-to-Book Ratio (P/B)P/B
P/B expresses how cheaply a stock trades relative to its fundamentals. Value investors to identify stocks trading below intrinsic value when P/B aligns with the rest of the VMCI 120-indicator com.
Price-to-Sales Ratio (P/S)P/S
P/S is the metric used to how cheaply a stock trades relative to its fundamentals.
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