RE: High Piotroski F-Score 829 Apr 2019 14:58
TO HELP UNDERSTAND
Calculation / Definition of F-Score
Piotroski's approach essentially looks for companies that are profit-making, have improving margins, don't employ any accounting tricks and have strengthening balance sheets. The nine variables are split into three groups:
Profitability
"A positive earnings trend is suggestive of an improvement in the firm’s underlying ability to generate positive future cash flows."
Is the company making a profit?
Details ?
PASS
Is it generating cash?
Details ?
PASS
Is it making more cash than it's reporting as profit?
Details ?
PASS
Is it more profitable than it was last year?
Details ?
PASS
Leverage, Liquidity, and Source of funds
"I assume that an increase in leverage, a deterioration of liquidity, or the use of external financing is a bad signal about financial risk."
Is the company's long term debt reducing or stable?
Details ?
PASS
Is it increasing its ability to pay short term debts
Details ?
FAIL
Is the company trading without having to raise funds from shareholders?
Details ?
PASS
Operating Efficiency
"The remaining two signals are designed to measure changes in the efficiency of the firm’s operations."
Is pricing power improving and/or costs reducing?
Details ?
PASS
Is it more productive than last year?
Details ?
PASS
****SO JUST ONE FAIL.....SO A CRACKING SCORE OF 8.OUT OF 9****
SOURCE https://www.stockopedia.com/share-prices/shanta-gold-LON:SHG/