Piotroski F-Score
A 9-point scoring system that grades a company's financial health across profitability, leverage, and efficiency.
What is Piotroski F-Score?
The Piotroski F-Score, developed by accounting professor Joseph Piotroski in 2000, assigns one point for each of nine financial conditions — four measuring profitability, three measuring leverage and liquidity, and two measuring operating efficiency. Scores range from 0 to 9. A score of 8 or 9 indicates strong fundamentals; a score of 0 to 2 signals financial weakness. Piotroski found that buying high-F-Score value stocks and shorting low-F-Score value stocks significantly outperformed the market over his study period.
Formula
Worked Example
FY2024 vs FY2023
Source: Apple 10-K FY2024 (2024-11-01)
Calculate Piotroski F-Score
1 if return on assets is positive this year, 0 otherwise
1 if operating cash flow is positive this year, 0 otherwise
1 if ROA is higher than the prior year, 0 otherwise
1 if operating CF / assets > net income / assets (low accruals), 0 otherwise
1 if long-term debt ratio is lower than the prior year, 0 otherwise
1 if current ratio is higher than the prior year, 0 otherwise
1 if the company did not issue new common shares, 0 if it did
1 if gross margin is higher than the prior year, 0 otherwise
1 if asset turnover is higher than the prior year, 0 otherwise
Piotroski F-Score
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