Forensic accounting scores: Altman, Piotroski, Beneish, Sloan

Every company page shows a handful of forensic scores. They are decades-old academic formulas that turn a company's own reported figures into a single read on distress, strength, earnings quality, or manipulation risk. We compute each one from SEC filings alone, with no market price anywhere, so nothing here is a valuation. They are screens, not verdicts, and any score is left blank when the inputs are missing rather than guessed.

Altman Z: distress

The Altman Z-Score estimates how close a company is to financial distress. We use the book-value form (the Z″ variant), which drops market capitalization, so it needs no price data and works for any company. It weighs working capital, retained earnings, operating earnings, and equity against assets and liabilities. Above 2.6 reads as a safe zone, 1.1 to 2.6 as a grey zone, and below 1.1 as distress. A falling Z often moves before a company files the 8-K that reports a bankruptcy.

Piotroski F: fundamental strength

The Piotroski F-Score is a nine-point checklist of fundamental health, one point each for passing tests across profitability, leverage and liquidity, and operating efficiency. Examples include positive net income, positive operating cash flow, a falling debt load, and improving margins. Eight or nine is strong, zero to two is weak. It rewards companies that are improving on the basics, which is why value investors pair it with cheapness.

Beneish M: earnings-manipulation risk

The Beneish M-Score is an eight-ratio screen for earnings manipulation. It compares the latest year with the prior one across measures like receivables versus sales, gross margin, asset quality, and accruals, and combines them into one number. A score above negative 1.78 has historically flagged a higher likelihood of manipulation. It is a screen, never proof, and we only compute it when every input for both adjacent years is cleanly present.

Sloan accruals: earnings quality

The Sloan accruals ratio measures how much of reported profit is backed by cash. We compute it as net income minus operating cash flow, divided by total assets. When earnings run well ahead of the cash the business actually generated, the accruals are high, and high accruals are a classic earnings-quality red flag and a precursor to restatements and reversals. Low accruals mean the profit is cash-backed.

How we use them

Each score appears on the company page next to the figures it is built from, so you can check the math against the filing. They feed our plain-English good signs and warning signs, and the quality score. They are descriptive factors drawn from the company's own SEC data, not advice, and the formulas and exact inputs are listed in the Methodology. For the spin-off-specific research, see the Spinoff Scorecard.