The Sales and Assets criteria for company size in the Value Investing framework of Benjamin Graham — Warren Buffett's mentor — need to be adjusted using the Consumer Price Index.
Criteria For Size
Graham's framework states that a stock for Defensive investment should have:
"Not less than $100 million of annual sales... not less than $50 million of total assets for a public utility."
Note: Graham does not seem to have recommended using Market Capitalization.
Inflation Adjustment
When adjusted for Inflation — or the increase in the Consumer Price Index (CPI) — since the time the above was written in 1971, these figures work out to $500 million and $250 million respectively. These are the default selection criteria today on GrahamValue.
Note: Non-U.S. economies such as the U.K. may require different values for these criteria.
2022 Update
The above default values were created when GrahamValue was founded in 2012.
The CPI Inflation Calculator by the U.S. Bureau of Labor Statistics yields values of $700 million and $350 million for these criteria as of 2022.
Customization
The sliders on the Advanced Graham Screener allow for customization of these Graham's criteria.
Size in Sales (100% ⇒ 500 Million)
A value of 100% on the Size in Sales filter implies a Sales value of 500 Million. The filter moves in steps of 20% which corresponds to increments of 100 Million each.
Size in Assets (100% ⇒ 250 Million)
Similarly, a value of 100% on the Size in Assets filter implies a Total Assets value of 250 Million. This filter too moves in steps of 20%, which corresponds to increments of 50 Million each.
Setting the Size in Sales and Size in Assets filters to 140% on the Advanced Graham Screener will show stocks with Sales and Total Assets of 700 million and 350 million respectively, in the listed currency.
Filter Calculator
The below JavaScript calculator can be used to automate the Inflation / Currency to Filter calculation.
For example — as of 2022 — enter 700 and 1 for the U.S., or 700 and 0.83 for the U.K.
Inflation Since 1971 (%)
Conversion Rate from USD
Size Filter Value (%)
Watch Video
Benjamin Graham
A Value Investing masterclass by Graham and dean Courtney Brown, at Columbia Business School (circa 1955).
The topics covered include the role of Inflation, investor psychology, the Efficient Market Hypothesis (EMH), investing on Margin, and Dollar Cost Averaging (DCA).
Submitted by GrahamValue. Created on Tuesday 13th August 2019. Updated on Monday 24th March 2025.
Comments
Inflation
Hello Serenity
Would you consider updating the 1971 values to today's inflated values
https://www.bls.gov/data/inflation_calculator.htm
this would roughly be 7 times the $100 & $50 million value, or 700 & 350 million
(how sad for those on fixed incomes!)
Correct
Dear Tranquility,
Thank you for your comment!
You're correct. The 5x multiplier for inflation is from when GrahamValue was first launched for the U.S. market in 2012. The inflation multiplier now would probably be closer to 7x.
However, this also varies across regional economies. So, for the moment, this has been left to the user to customize as shown in the example above.
Thank you again for your comment!
Duration of inflation
Adjusting for inflation is from 1971 to 2023, which amounts to 100 million dollars. It is now equal to 766 million on the inflation calculator website. Is my method correct or not? Also, adjusting inflation in relation to the growth of profits for 10 years from 2013 to 2023, which now appears to me at 32.49%. Is what you have done correct?
Responses to Messages
Dear Omar_H,
Thank you for your comment!
Given below are responses to all your queries sent on chat. You can also create a new Topic on the Forums to discuss all such General Support Queries.
That is correct. The adjusted USD value from the above link as of today is $767M. Google says SAR 1 is USD 3.75 today, so $767M would be the equivalent of SAR 2.877B.
You use also the Filter Calculator given above with the said values. Entering 767 and 3.75 gives a value of 575 for the Size in Sales filter.
Please note that multiple prominent Value Investors such as Graham, Buffett and Bogle have advised Investors to avoid Timing and focus on Pricing instead.
The following are the list of Saudi Arabian banks in GrahamValue's database. Al-Rajhi Bank does not appear to be among them.
A search for the symbol TADAWUL lists the Saudi Tadawul Group Holding Company SJSC (1111.SR).
Kindly elaborate on what you mean by "Circulation: 1120".
That is correct. Investing in economies other than the U.S. is explained using the example of the U.K.
The Size in Sales filter can be adjusted for your Exchange as described above. For the full list of filters and adjustments, please the Video Tutorials in the Quick Reference.
All stocks on GrahamValue are updated cyclically about twice a week.
$766M is correct, as discussed above.
Earnings Growth and its Filter Calculator are discussed separately, and are also covered in the Video Tutorials in the Quick Reference.
Thank you again for your comment!
I have a question. Suppose
I have a question. Suppose that one of the defense companies attached the financial statements on 3/31/2023. When measuring the volume of sales and profit growth, should I check inflation to today’s date or to the date of the company’s annual statements?
Statement Date Ideally
Dear Omar_H,
Thank you for your comment!
Ideally, one should perhaps check against the inflation rate on the exact statement date. However, the more common approach is probably to check against the current inflation rate since inflation rates do not usually vary much over a single year.
Thank you again for your comment!