What is the Piotroski F-Score?
Developed by accounting professor Joseph Piotroski in 2000, the F-Score is a 0-9 rating system that measures a company’s financial strength. Each point is earned by passing a specific test in three areas:
Profitability (4 points): Positive net income, positive operating cash flow, rising ROA, and cash flow exceeding net income.
Leverage & liquidity (3 points): Decreasing long-term debt ratio, increasing current ratio, and no new share dilution.
Operating efficiency (2 points): Improving gross margins and improving asset turnover.
Why it matters for investors
The F-Score was originally designed to separate strong companies from weak ones among low-price-to-book stocks. But it works well as a general quality filter too.
A high F-Score means the company is improving across multiple dimensions simultaneously. That’s hard to fake and difficult to sustain without genuine business strength.
How Stock Analyzer scores it
| Score | F-Score | What it means |
|---|---|---|
| A | 8 – 9 | Strong financial health |
| C | 3 – 7 | Average, mixed signals |
| E | 0 – 2 | Weak fundamentals |
What to watch out for
The F-Score is backward-looking — it tells you about the last reporting period, not the future. A company in rapid decline might still have a decent F-Score from its recent past. Combine it with forward-looking metrics like analyst price targets and DCF analysis.