Thanks for sharing; I've never come across this before. If I follow the worked example, it appears that the earnings information is not captured by the formula, only the Tangible Book Value. I cannot figure out how the 22.5 (1.5 NTA x 15 earnings) links to the actual earnings of the company at a point in time. I have read Graham's book (the first one I read when I went full time in this business), and managed to derive some formulas from that book, the most basic of which is this:
EPV (earnings power value) = EPS (average earnings in the next 7 years) x C (capitalisation rate where 8<C<21; a concept close to P/E)
Accepting that this is still more of an art than a science, my EPV valuation of BBR came up to more than $1.00, hence I am not surprised that the Graham number given in your reference is $0.94. But of course, in the real world, the market may not care about such things, so we need to pepper this with a healthy dose of realism!
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