Piotroski F Score Calculator
This Piotroski F score calculator will help you assess the strength of a company’s financial state. The Piotroski F score uses nine factors taken from a firm’s financial statementsThree Financial StatementsThe three financial statements are the income statement, the balance sheet, and the statement of cash flows. These three core statements are. Using these factors, it calculates a measure of the strength of a firm’s financial position.
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Piotroski F Score Factors
CFI’s Piotroski F score calculator can be used to assess a company’s financial strength by looking at nine factors. A score of either 0 or 1 is rewarded for each of these factors, depending on whether it has been fulfilled or not. The higher the score, the more reliable a stock is to invest in. These factors are categorized into three different sources of financial strength that analysts like to look at.
Profitability
ROA: Return on assetsReturn on Assets & ROA FormulaROA Formula. Return on Assets (ROA) is a type of return on investment (ROI) metric that measures the profitability of a business in relation to its total assets. This ratio indicates how well a company is performing by comparing the profit (net income) it's generating to the capital it's invested in assets.. Net IncomeNet IncomeNet Income is a key line item, not only in the income statement, but in all three core financial statements. While it is arrived at through divided by year beginning total assets. F score is 1 if ROA is positive, 0 otherwise.
CFO: Operating cash flowOperating Cash FlowOperating Cash Flow (OCF) is the amount of cash generated by the regular operating activities of a business in a specific time period. divided by year beginning total assets. F score is 1 if CFO is positive, 0 otherwise.
∆ROA: Change in ROA from the prior year. If ∆ROA > 0, F score is 1. Otherwise, F score is 0.
ACCRUAL: CFO compared to ROA. If CFO > ROA, F score is 1. Otherwise, F score is 0.
Leverage, Liquidity, and Source of Funds
∆LEVER: Change in long-term debtLong Term DebtLong Term Debt (LTD) is any amount of outstanding debt a company holds that has a maturity of 12 months or longer. It is classified as a non-current liability on the company’s balance sheet. The time to maturity for LTD can range anywhere from 12 months to 30+ years and the types of debt can include bonds, mortgages/average total assets ratio. If the ratio compared to the prior year is lower, F score is 1, 0 otherwise.
∆LIQUID: Change in current ratioCurrent Ratio FormulaThe Current Ratio formula is = Current Assets / Current Liabilities. The current ratio, also known as the working capital ratio, measures the capability of a business to meet its short-term obligations that are due within a year. The ratio considers the weight of total current assets versus total current liabilities. It indicates the financial health of a company. If the current ratio increases from the prior year, F score is 1, 0 otherwise.
EQ_OFFER: Total common equityCommon StockCommon stock is a type of security that represents ownership of equity in a company. There are other terms – such as common share, ordinary share, or voting share – that are equivalent to common stock. between years. If common equity increases compared to prior year, F score is 1, 0 otherwise.
Operating Efficiency
∆MARGIN: Change in gross margin ratioGross Margin RatioThe Gross Margin Ratio, also known as the gross profit margin ratio, is a profitability ratio that compares the gross profit of a company to its revenue.. If the current year’s ratio minus prior year’s ratio > 0, F Score is 1, 0 otherwise.
∆TURN: Change in asset turnover ratioAsset Turnover RatioThe asset turnover ratio, also known as the total asset turnover ratio, measures the efficiency with which a company uses its assets to produce sales. A company with a high asset turnover ratio operates more efficiently as compared to competitors with a lower ratio. (revenue/beginning year total assets). If current year’s ratio minus prior years > 0, F score is 1, 0 otherwise.
CFI’s Piotroski F score calculator uses all of these factors to evaluate a company. Check out our template to conduct your own analysis on a company’s financial status!
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