Archive for March, 2015

What is the Piotroski score of your stock ?

March 24, 2015

Tyro Investor

In fundamental analysis, no single tool or ratio will give the complete picture of the stock. Let it be P/E, EPS, D/E etc, all these ratios must be considered together to get the overall financial health of the company. In today’s post let’s know about something called “Piotroski score” which gives a number using fundamental analysis. What is this number and how it must be used? Let’s see below:

Joseph Piotroski, an American professor of Accounting at Stanford University. He rose to fame by his most influential 2000 paper he wrote at University of Chicago titled “Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers” (Click here link for the full report)

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His idea behind this was “Because value stocks are by definition often troubled companies, many will not possess the financial resources to recover. Consequently, if it was possible to improve…

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