Piotroski's F-score

The Piotroski F-score is a measure of the financial strength of a company. It is preferable to not simply call it "F-score" except in a context that makes it clear that Piotroski's measure is what is meant, as the same term is used in statistics to refer to a measure of of the accuracy of a test.

Comparison to alternatives

Compared to Altman's Z-score, the F-score tests more inputs but does not weight them: with the Z-score a very good or bad performance has a greater impact, whereas with the F-score only whether a number is above or below zero matters. The Z-score also uses only five variables against the F-score's nine.

Both are easily automated for screening, and both rely on data from the financial statements.

Neither is a substitute for fundamental analysis, and is therefore best used for screening prior to thorough analysis, except where a purely mechanical strategy is being implemented.

Calculation of Piotroski's F-Score

The F-score is the sum the scores for each of nine tests. Each test scores one for a pass and zero for a fail. The tests are:

Profitability related

  1. Net profit is positive
  2. Operating cash flow is positive
  3. net profit ÷ total assets at beginning of year, minus the same number for the previous year is positive.
  4. operating cash flow is greater than net profit

Capital structure and debt service

  1. Long term debt ÷ by average assets has not increased
  2. The Current ratio has increased (the change is more then zero, so even a negligible increase passes the test!)
  3. no raising of ordinary (common) equity over the previous year: this test is passed if the company did not issues any ordinary shares.


  1. Gross margin has improved over the previous year.
  2. Asset turnover has increased.

For thorough explanation see Piotroski's original paper.