What is a Piotroski F-Score?
A Piotroski F-Score is used to assess the strength of a firm's financial position and help financial investors locate the best-value stocks. The score can be any number between 0 and 9, with 9 considered to be the best.
Where have you heard about a Piotroski F-Score?
The Piotroski F-Score was named after the Chicago Accounting Professor, Joseph Piotroski who penned a paper in 2000 about figuring out which shares had the best chance of recovering in price. Today, the score is used and useful in almost any investing situation.
What you need to know about a Piotroski F-Score.
For a company to be rated with a Piotroski F-Score, the company must meet certain criteria with each criteria met awarding the company with one point. Examples of criteria include a positive return on assets (ROA) in the current year, a higher return on assets in the current period compared to the ROA in the previous year and a higher gross margin compared to that of the previous year. The 'F' in Piotroski F-Score stands for financially sound.