A method of stock valuation developed by accounting Professor Joseph Piotroski in 2000. The scoring system allocates 1 point for every positive factor found in a company's financial statements. Financial information for the past 12 months is evaluated and compared to performance for the prior year. Stocks that have a score of 8 or 9 are considered strong performers.
Scoring criteria include: 1) Positive net income, 2) Positive cash flow, 3) Increase in return on assets, 4) Operating cash exceeds net income, 5) Decrease in debt, 6) Increase in working capital, 7) No increase in number of shares, 8) Increase in gross margin, 9) Higher percentage increase in sales than in total assets.