Piotroski F-Score
A 0-to-9 score adding one point for each favorable signal across profitability, leverage/liquidity and efficiency, comparing the latest financial year with the previous one.
Joseph Piotroski designed it in 2000 for a specific problem: among statistically cheap stocks there are genuine turnarounds and value traps, and they look alike from the outside. The nine tests are mechanical — does it make money? does it generate cash? is the margin improving? has it deleveraged? has it diluted holders? — and they offer no view of the future: they only measure whether last year beat the one before.
8 to 9 is considered strong and 0 to 2 weak, but the score says nothing about whether the stock is expensive: it's a financial-trend filter, not a valuation. Read it alongside price, never instead of it. And in banks and insurers several of the tests lose meaning, because their balance sheet doesn't work like an industrial company's.
Where to see it on ValuatePad
Year by year, for every company, in the tab Quality scores.