What the F-Score measures
Joseph Piotroski published the F-Score in 2000 in the Journal of Accounting Research to tell apart, among cheap stocks, the companies whose accounts were improving from those in decline. Nine yes-or-no tests compare the last fiscal year with the one before; each test passed is worth a point.
Full explanation, a worked example and the limits: our article on the Piotroski F-Score.
The nine tests
- Profitability: return on assets (net income / assets at the start of the year) positive; operating cash flow positive; return on assets higher than the year before; operating cash flow above net income.
- Debt and liquidity: long-term debt down relative to assets; current ratio (current assets / current liabilities) up; no new shares issued.
- Efficiency: gross margin up; asset turnover (revenue / assets) up.
How to read the result
On 7 November 2026, 52% of the large non-financial companies InvestIQ follows scored 7 or more and 4% scored 3 or less (stock market statistics). The trend matters as much as the level: a 6 that becomes an 8 tells a different story from an 8 that becomes a 6.
The score says nothing about the price, penalises fast growers (new shares, expanding assets) and does not suit banks or insurers. For the risk of default, use the Altman Z-Score calculator.
Why another calculator may differ
Piotroski scales return on assets, cash flow, debt and asset turnover by assets at the start of the year; some tools use average or year-end assets, which can flip a borderline test. Here, the dilution test gives the point when the share count did not increase.