Overview
The Piotroski F Score calculator is a tool that you can use to determine whether or not a company is a strong investment opportunity. This calculator uses several inputs that can be found in two years of a company's financial statements. These inputs are taken from the income statement, balance sheet, and cash flow statement. Using these inputs, the calculator determines a score of 0 or 1 based on 9 different criteria. These scores are then added up to determine a Piotroski F Score between 0-9. The higher the Piotroski F Score, the better the company may be to invest in. Additionally, this Piotroski F Score calculator includes a breakdown and explanation of each of the nine criteria that the F Score is calculated based on. The Piotroski F Score is a method of evaluating a company that was created by a Stanford professor, Joseph Piotroski. It is often used to determine the best value stocks to invest in. The Piotroski F Score is calculated using nine criteria that evaluate three different aspects of a company: Profitability
• ROA: Return on assets. Net Income divided by year beginning total assets. F score is 1 if ROA is positive, 0 otherwise.
• CFO: Operating cash flow 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 debt/average total assets ratio. If the ratio compared to the prior year is lower, F score is 1, 0 otherwise.
• ∆LIQUID: Change in current ratio. If the current ratio increases from the prior year, F score is 1, 0 otherwise.
• EQ_OFFER: Total common equity between years. If common equity increases compared to the prior year, F score is 1, 0 otherwise.
Operating Efficiency
Check out CFI's Financial Ratios Cheatsheet and Ebook for a more detailed breakdown on some of these ratios and metrics!
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