Piotroski F-Score

Definition

Piotroski F-Score
The Piotroski F-Score is a scoring system designed to evaluate the financial strength of companies using a set of nine criteria derived from their financial statements. These criteria cover profitability, asset quality, and leverage, each contributing one point to a total score ranging from zero to nine. A higher F-Score indicates robust financial health and improved prospects for value creation, making the metric particularly useful for value investors seeking to filter out weaker firms. By assessing aspects such as cash flow, changes in margins, and leverage, the Piotroski F-Score aids investors in identifying companies that may be undervalued by the market, ultimately supporting a disciplined, data-driven approach to long-term investing.

See also