Piotroski F-Score

With the help of 9 factors, a company is evaluated. Each factor can be 1 or 0. The total score gives the F score. Based on this score, the financial strength of a company can be estimated. An F-score between 7 and 9 points is strong. An F score between 0 and 2 is weak.

1. Net Profit

Definition

The net profit is the difference between revenues and total costs.

Score

0 if the net profit is negative.

1, if the net profit is positive.

2. Operating Cashflow

Definition

Operating cash flow (OCF) is a measure that reflects the portion of cash flow that results from the ordinary course of business of a business.

Score

0, if Operating Cashflow is negative.

1,if operating cashflow is positive.

3. Return on assets

Definition

Return on capital employed is a measure of the profitability of the equity and debt provided.

Score

0, if the current return on assets is lower than last year.

1, if the current return on assets is higher than last year.

4. Operating Cashflow versus Net income

Definition

Operating cash flow is a measure that reflects the portion of cash flow that results from the ordinary course of business of a business. The net profit is the difference between revenues and total costs.

Score

0, if operating cash flow is less than net profit.

1, if operating cash flow is greater than net profit.

5. Debt-equity ratio

Definition

The debt-equity ratio of a debtor is a business key figure that indicates the relationship between the balance sheet debt and equity.

Score

0 if the gearing has risen compared to last year.

1, if gearing has fallen from last year [/ vc_column_text] [/ dt_sc_toggle]

3rd degree liquidity

Definition

Third degree liquidity indicates the ratio of current assets to current liabilities of a company.

Score

0, if 3rd degree liquidity lower than last year.

1, if 3rd degree liquidity higher than last year.

7. Number of Shares

Definition

The number of shares indicates the total number of shares in a group.

Score

0, if the number of shares increased compared to last year.

1 if the number of shares has not risen compared to the previous year. [/ Vc_column_text] [/ dt_sc_toggle]

Gross Profit

Definition

The gross profit is a business key figure that represents the difference between revenue and the use of goods or materials.

Score

0, if the gross profit is not higher than in the previous year.

1, if the gross profit is higher than in the previous year.

9. Capital TurnOver

Definition

The key figure Capital turnover indicates how often the total capital is transacted through the turnover.

Score

0, if capital turnover is not higher than in the previous year.

1, if capital turnover higher than last year.

High	Medium	Low
7-9 points	3-6 points	0-2 points