[PYTHON] What is Piotroski's F-Score?

1 What about this article?

Joel Greenblatt's Magic formula is a well-known index when screening stocks for stock investment, but in this article, another stock screening method, Piotroski. I think I introduced you to F-Score.

2 What is Piotroski's F-Score?

Of the 9 criteria below, if the target issue meets the criteria, +1 point will be added.

2-1 Profitability Criteria If the criteria are met, the score will be 1 point, and if not, the score will be 0 points.

number Criteria score
1 The return for the past year has been positive 0 or 1
2 Operating cash flow for the past year(operating cash flow)Is a plus 0 or 1
3 ROA of this year compared to the previous year(Return on total assets)Is rising 0 or 1
4 Operating cash flow for this year/Total assets>Being ROA 0 or 1
Subtotal score 1 0 ~ 4

2-2 Leverage, Kiquidity and Source of Funds Criteria

number Criteria score
5 This year's long-term liabilities have decreased compared to the previous year 0 or 1
6 Current ratio of this year compared to the previous year(*1)Is rising 0 or 1
7 Not issuing new shares in the previous year 0 or 1
Subtotal score 2 0 ~ 4

(* 1) The current ratio (= current assets / current liabilities) is an index showing how much assets that can be cashed within one year exceed the liabilities that should be repaid within one year.

2-3 Operating Efficiency Criteria

number Criteria score
8 Gross profit for this year compared to the previous year(gross margin)Is rising 0 or 1
9 This year's capital turnover compared to the previous year(asset turnover ratio)Is rising 0 or 1
Subtotal score 3 0 ~ 2

Gross margin = Sales-Cost of sales Asset turnover ratio = sales / total capital

2-4 F-Score

F-Score is the score of the above 9 items (= score subtotal 1 + score subtotal 2 + score subtotal 3). </ b> We will invest in stocks with F-Score of 8 points or more, and recalculate F-Score once every six months or once a year. It is generally said that the F-Score concept is suitable for selecting small-cap and medium-cap stocks.

3 Coming Soon How much return can you get if you take the F-Score strategy for Japanese stocks? I would like to do coding in Python and verify it.

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