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The Piotroski F-score rates financial strength from 0 to 9 across nine binary tests of profitability, leverage, and efficiency. We compute each test from SEC XBRL facts, comparing the current fiscal year against the prior one.
The Piotroski F-score, from Joseph Piotroski's 2000 research, awards one point for each of nine binary tests of a company's fundamentals. The points sum to a score from 0 to 9, where higher means broadly improving financial strength.
The nine tests fall into three groups. Profitability: positive return on assets, positive operating cash flow, improving return on assets year over year, and operating cash flow exceeding net income relative to assets (an earnings-quality check). Leverage and liquidity: falling leverage, a rising current ratio, and no share dilution. Operating efficiency: a rising gross margin and rising asset turnover.
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