CFO positive
What it measures¶
CFO — cash flow from operations, or operating cash flow — is the cash that came in from running the business over the year, after paying suppliers, staff, interest and tax. It is the first total of the cash-flow statement, the statement that records cash actually received and paid rather than income and costs as accountants recognise them.
This check computes operating cash flow ÷ total assets at the start of the year for the latest fiscal year and asks: was it above zero? Dividing by assets lets the line be the same for a small company and a large one.
Why it is on the page¶
Profit is partly an accounting judgement; cash is a count. A company that reports a profit but brings in no cash from its operations is worth a closer look, and one that brings in cash even in a loss-making year has room to keep going. This is the second check of Joseph Piotroski's F-score checklist.
Thresholds, their source and the population they were fitted on¶
| Result | When |
|---|---|
| ✓ passed | operating cash flow ÷ total assets at the start of the year is above 0 |
| ✕ failed | it is 0 or below |
| ○ not evaluable | the operating cash flow of the latest year, or the total assets of the year before, is not stored |
- Source: Piotroski (2000), the check he called
F_CFO. - Fitted on: US companies whose shares were priced low against the equity on their balance sheet, fiscal years 1976–1996.
- Evidence grade: peer-reviewed and replicated.
- Basis: absolute — the line is zero for every company.
A worked example¶
Honeywell International, fiscal year 2025, from the statements stored on 25 October 2026: operating cash flow came to 8.5% of the assets held at the start of the year — above zero, passed.
NuScale Power, in the same year, used more cash in its operations than it brought in: −84.4% of its starting assets, so the check failed.
What “No verdict” means here¶
The check is not evaluable when no cash-flow statement is stored for the latest year, or the year before has no balance sheet. It then leaves the Profitability & returns count, with the missing input named. A missing cash-flow statement also withholds the band's overall figure, because about a third of all checks read it.
What the verdict is and is not¶
A pass says the business brought in more cash from its operations than it spent on them in the latest fiscal year. It does not say how much was left after investing in equipment (that is free cash flow), it is not a forecast, and it is not an instruction to trade the shares.