Question

What is the Piotroski F-Score and what does it tell you about a company? As an investor, what might this analytical data reveal about a company and would you find it useful?

Answer 1

The Piotroski score helps in identifying the companies with a good fundamental and eliminating the weak companies.

The score lies between 0 - 9. If a company has got a Piotroski score of 8 0r 9, this means that the profitability of the company is very good.

The scpre is given to the companies on the basis of 9 tests performed in 3 areas which are : profitability, capital structure, and operating efficiency.

As an investor this score helps them identify the real value investing stocks. This helps them to screen out the real value stocks, from the sock s which appear to be creating a value for the investor but in reality are weak stocks.The investors may simply screen out the stocks with a score of 0,1 or 2 as these stocks are extremely weak stocks. This score helps to get scores based on the financial statements of a company.