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Piotroski F-Score Calculator

Enter this year's and last year's financials to compute the 9-point F-Score.

How it is calculated

The tool awards one point for each of nine yes/no tests and adds them up to a score from 0 to 9. Profitability: net income above 0; operating cash flow above 0; ROA higher than last year; operating cash flow greater than net income. Leverage and liquidity: long-term debt ratio lower than last year; current ratio higher; shares outstanding not higher than last year. Efficiency: gross margin higher; asset turnover higher. Each test compares only the two numbers you give, so ties score nothing except for shares, where equal counts as a pass. All 14 fields must be filled in (use 0 where needed), or no score is shown. Enter ROA and gross margin in the same unit both years.

Worked example

Net income 120 and operating cash flow 150: both positive, and 150 > 120, so 3 points. ROA rose from 5 to 6: 4 points. Debt ratio fell from 0.35 to 0.30: 5. Current ratio rose from 1.6 to 1.8: 6. Shares unchanged at 100: 7. Gross margin fell from 39 to 38: no point. Asset turnover fell from 0.85 to 0.8: no point. Total: 7 / 9, which is usually read as a financially strong, improving company.

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Common mistakes

  • Swapping this year and prior year in a pair. The tests check improvement, so reversing ROA or debt flips the point.
  • Entering a debt ratio where a higher number is better. The test gives a point when long-term debt falls; a rising ratio scores nothing.
  • Leaving a field empty because it seems unimportant. Every one of the 14 fields is required, otherwise there is no result.
  • Mixing definitions between years, such as ROA from one data provider and the prior year from another, which produces a false improvement.
  • Treating the score as a buy signal. It only counts 9 tests; it says nothing about price, industry or why a figure changed.

Sources

About this calculator

The Piotroski F-Score, developed by accounting professor Joseph Piotroski in 2000, scores a company from 0 to 9 by awarding one point for each of nine binary financial tests passed, grouped into three categories: profitability (positive net income, positive operating cash flow, improved return on assets, cash flow exceeding net income), leverage/liquidity (lower long-term debt, improved current ratio, no new share issuance), and operating efficiency (improved gross margin, improved asset turnover).

Value investors use the F-Score to screen out financially deteriorating companies from a pool of statistically cheap (low price-to-book) stocks, on the premise — supported by Piotroski's original research — that high-scoring, fundamentally improving companies within that cheap universe tend to outperform low-scoring ones.

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