An optical grid analyzer automatically determines strain in sheet metal during or following a forming operation by measuring the change in radius of open circles which are stretched into ellipse patterns as a result of the forming operation. The system includes a hand-held video camera unit which produces an analog video image of one of the ellipse patterns. An interface device converts the analog image to a binary image, and then converts the binary image to a transition point image which represents the coordinates of those pixels located at an edge of the pattern. A digital computer sorts the transition point data into inner and outer edges of the pattern. The digital computer then derives major and minor radii for the outer edge and for the inner edge, and averages the inner and outer edge radii to produce average major and minor radii representing the center of the pattern. The computer then calculates strain values based upon the average major and minor radii and the radius of the undeformed circle.