Piotroski F-Score Stocks in Financials

The Piotroski F-Score is a 9-point scoring system developed by accounting professor Joseph Piotroski in 2000 to identify financially strong value stocks. The original score evaluates companies across three dimensions: Profitability (4 signals), Leverage/Liquidity (3 signals), and Operating Efficiency (2 signals). Billiver uses a simplified 6-point version based on publicly available SEC EDGAR data, focusing on the most impactful factors: (1) Profitability - Positive ROA shows the company generates returns on assets, (2) Cash Generation - Positive operating cash flow indicates real earnings quality, (3) Earnings Quality - Operating cash flow exceeding net income suggests low accounting manipulation, (4) Financial Health - Debt-to-equity below 0.5 shows conservative leverage, (5) Cash Flow Strength - Positive free cash flow means the company generates cash after investments, (6) Profit Margins - Profit margin above 10% indicates pricing power and efficiency. Companies scoring 5-6 on our simplified scale (equivalent to 7-9 on the full scale) demonstrate strong financial fundamentals. This approach has been validated in academic research and is used by value investors to find quality companies trading at reasonable prices.