TreasureXPiotroski F-Score Explained: A 9-Point Financial Health Checklist
The Piotroski F-Score grades a company's financial health from 0-9 using only public financial statements. Here's exactly what it measures.
What is the Piotroski F-Score?
Developed by accounting professor Joseph Piotroski, the F-Score is a 9-point checklist that grades a company's financial health using only numbers from its financial statements — no analyst opinions, no story, just the filings.
Each of the 9 criteria is a yes/no test. A company earns one point for each test it passes, for a score from 0 (very weak) to 9 (very strong). It was originally designed to separate winners from losers among cheap (low price-to-book) stocks, but it's useful as a general financial-health screen for any company.
The 9 criteria, grouped into 3 categories
Profitability (4 points): positive return on assets, positive operating cash flow, improving return on assets year-over-year, and cash flow from operations exceeding net income (a sign of high-quality, non-manipulated earnings).
Leverage, Liquidity & Funding (3 points): decreasing long-term debt relative to assets, an improving current ratio (short-term liquidity), and no new shares issued (avoiding dilution of existing shareholders).
Operating Efficiency (2 points): an improving gross margin, and improving asset turnover (more revenue generated per dollar of assets).
How to read the score
7-9: Strong and improving fundamentals across most dimensions — the business is getting healthier, not just growing.
4-6: Mixed signals. Worth digging into which specific criteria are failing before drawing conclusions.
0-3: Deteriorating fundamentals — worth understanding why before assuming the stock is simply "cheap."
The F-Score says nothing about valuation or growth potential — a struggling company can have a low score and still be a reasonable turnaround bet, and a high-growth company reinvesting heavily can score lower on some liquidity criteria even while thriving. It's one input, not a verdict.
Try it yourself
TreasureX computes a real Piotroski F-Score for any US-listed stock automatically from 10 years of financial history, alongside a broader Financial Health grade (A-F) covering profitability, solvency, quality/moat, and growth.
Educational content only — not investment advice. Do your own research.