| name | financial-health-scores |
| description | Retrieve financial health scores including Altman Z-Score and Piotroski Score for public companies. Use when assessing bankruptcy risk, financial strength, value investing screening, or credit quality analysis. |
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:
| Metric | Value (USD) |
|---|
| Working Capital | 36,928,000,000 |
| Total Assets | 137,806,000,000 |
| Retained Earnings | 39,003,000,000 |
| EBIT | 5,616,000,000 |
| Market Cap | 1,400,635,834,800 |
| Total Liabilities | 54,941,000,000 |
| Revenue | 94,827,000,000 |
Data Source: octagon-financials-agent
Altman Z-Score Interpretation
The Altman Z-Score predicts bankruptcy probability:
| Z-Score Range | Interpretation |
|---|
| > 3.0 | Safe Zone - Low bankruptcy risk |
| 1.8 - 3.0 | Grey Zone - Moderate risk, needs monitoring |
| < 1.8 | Distress Zone - High bankruptcy risk |
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:
| Score Range | Interpretation |
|---|
| 8-9 | Strong - High quality value stock |
| 5-7 | Moderate - Average financial health |
| 0-4 | Weak - Poor financial health |
Piotroski Components (9 criteria)
Profitability (4 points):
- Positive Net Income
- Positive Operating Cash Flow
- Return on Assets improvement
- 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]"
