Financial Health Scores

Financial Health Scores

Retrieve financial health scores including Altman Z-Score and Piotroski Score for public companies using the Octagon Claude plugin.

Prerequisites

Ensure the Octagon Claude plugin is installed and configured in Claude Code before invoking this skill.

Query Format

Retrieve financial health scores for <TICKER>, including the Altman Z-Score and Piotroski Score.

MCP Call:

{
  "server": "octagon-claude-plugin",
  "toolName": "octagon-agent",
  "arguments": {
    "prompt": "Retrieve financial health scores for TSLA, including the Altman Z-Score and Piotroski Score"
  }
}

Output Format

The agent returns health scores with supporting metrics:

Altman Z-Score: 16.84 (calculated using working capital, total assets, retained earnings, EBIT, and market cap). A score above 3.0 indicates low bankruptcy risk.

Piotroski Score: 6 (out of a maximum 9). This score assesses profitability, leverage, liquidity, and operating efficiency.

Supporting Financial Metrics:

Data Source: octagon-financials-agent

Altman Z-Score Interpretation

The Altman Z-Score predicts bankruptcy probability:

Z-Score Formula

Z = 1.2(WC/TA) + 1.4(RE/TA) + 3.3(EBIT/TA) + 0.6(MC/TL) + 1.0(Rev/TA)

Where:

• WC = Working Capital
• TA = Total Assets
• RE = Retained Earnings
• EBIT = Earnings Before Interest and Taxes
• MC = Market Cap
• TL = Total Liabilities
• Rev = Revenue

Piotroski Score Interpretation

The Piotroski F-Score (0-9) assesses financial strength:

Piotroski Components (9 criteria)

Profitability (4 points):

1. Positive Net Income
2. Positive Operating Cash Flow
3. Return on Assets improvement
4. OCF > Net Income (accruals quality)

Leverage/Liquidity (3 points): 5. Lower long-term debt ratio 6. Higher current ratio 7. No new share issuance

Operating Efficiency (2 points): 8. Higher gross margin 9. Higher asset turnover

Analysis Tips

Combined Assessment

Use both scores together:

• High Z-Score + High Piotroski = Financially healthy
• High Z-Score + Low Piotroski = Watch operating trends
• Low Z-Score + High Piotroski = Leverage concern
• Low Z-Score + Low Piotroski = Avoid or deep value

Value Investing Application

Piotroski Score designed for:

• Screening high book-to-market stocks
• Identifying quality within value
• Avoiding value traps

Credit Analysis

Z-Score useful for:

• Bond investment decisions
• Supplier credit assessment
• Counterparty risk evaluation

Sector Considerations

Scores work best for:

• Manufacturing companies (Z-Score original use)
• Mature businesses with stable operations
• Less reliable for: financials, early-stage, asset-light

Follow-up Queries

Based on results, suggest deeper analysis:

• "What factors contributed to [COMPANY]'s Piotroski Score versus industry peers?"
• "How does [COMPANY]'s Altman Z-Score compare to its historical averages?"
• "Break down the individual components of [COMPANY]'s Piotroski Score"
• "Compare [COMPANY]'s financial health scores to [PEER1] and [PEER2]"