Definition
The Piotroski F-Score is a 9-point checklist developed by Stanford accounting professor Joseph Piotroski in 2000. Rather than valuing a company, it scores whether nine fundamental measures — covering profitability, leverage & liquidity, and operating efficiency — improved or worsened compared to the prior fiscal year. Each criterion is worth one point, for a score from 0 to 9. It's a trend measure, not a snapshot — for a single-point-in-time bankruptcy-risk read, pair it with the Altman Z-Score.
Side-by-side comparison
| # | Criterion | Group | Passes when… |
|---|---|---|---|
| 1 | Positive return on assets | Profitability | Net Income ÷ Total Assets is greater than zero |
| 2 | Positive operating cash flow | Profitability | Cash flow from operations is greater than zero |
| 3 | Return on assets improved | Profitability | This year's ROA is higher than last year's |
| 4 | Operating cash flow exceeds net income | Profitability | Cash flow from operations is higher than net income — a sign profit isn't just accounting accruals |
| 5 | Leverage decreased | Leverage & Liquidity | Total debt relative to total assets fell versus last year |
| 6 | Current ratio improved | Leverage & Liquidity | Current assets ÷ current liabilities rose versus last year |
| 7 | No new share dilution | Leverage & Liquidity | Shares outstanding did not increase versus last year |
| 8 | Gross margin improved | Operating Efficiency | Gross profit ÷ revenue rose versus last year |
| 9 | Asset turnover improved | Operating Efficiency | Revenue ÷ total assets rose versus last year |
How to interpret it
Worked example
Worked example
Frequently asked questions
What is a good Piotroski F-Score?
A score of 7 to 9 is generally read as strong — most of the 9 year-over-year criteria moved favourably. 3 to 6 is a mixed/moderate result, and 0 to 2 suggests most fundamentals deteriorated. These are descriptive bands, not investment signals on their own.
Is the Piotroski F-Score a buy signal?
No — it's a measurement of financial-statement trend, not a recommendation. A high F-Score describes improving fundamentals; it says nothing about whether a stock's price already reflects that improvement, which is a separate valuation question the F-Score doesn't answer.
Can a company have a high F-Score and still be overvalued?
Yes — the F-Score only measures the direction of 9 fundamental ratios year over year. It has no opinion on price. A company can be genuinely improving its fundamentals (a high F-Score) while its stock price has already run ahead of that improvement, or beyond it.
How is the Piotroski F-Score different from the Altman Z-Score?
F-Score is a trend: 9 yes/no checks comparing this year to last year. Z-Score is a snapshot: one weighted formula reading bankruptcy risk at a single point in time. A company can score well on one and poorly on the other — for example, sitting in Z's Grey Zone while F shows clear improvement, or vice versa.
Does the Piotroski F-Score work for young or pre-revenue companies?
Not reliably. Several criteria (positive ROA, positive operating cash flow, improving margins) assume a company is already profitable or close to it — a genuinely pre-revenue or deep-investment-phase company will fail most of them by construction, which says more about its stage than its quality. KashVector's growth-stock ticker pages use a different framework (Rule of 40, implied growth) instead.
What does it mean if only some of the 9 criteria are shown?
Each criterion checks its own required fields independently — a company missing one specific input (say, long-term debt data) skips just that criterion, and the score is reported out of a smaller denominator (e.g. 6/8) rather than guessing or showing a misleading score out of 9.