QualityF-Score#47
ROIC Consistency measures how efficiently a company converts capital into earnings.
By Javier Sanz, Founder & Lead AnalystEditorially reviewed
Last updated: Reviewed by: Javier Sanz
Formula
Sum of 9 binary tests (0 or 1 each)
Description
Joseph Piotroski's financial strength scoring system, published in 2000. Each of 9 criteria earns one point across three categories: profitability (ROA, cash flow, ROA change, accruals), leverage/liquidity (debt change, current ratio change, shares outstanding), and efficiency (gross margin, asset turnover). Used to separate strong value stocks from value traps.
Interpretation
7-9: Strong financial health (buy signal). 4-6: Average. 0-3: Weak (potential value trap). Piotroski's research showed that high F-Score stocks within the value universe dramatically outperformed low F-Score stocks.
Related metrics: Return on Equity (ROE), Return on Assets (ROA). (Updated 2026)
Further Reading
- SEC EDGAR primary filings on ROIC Consistency- Primary source filings used to calculate ROIC Consistency.
FAQ
How is ROIC Consistency calculated?+
ROIC Consistency uses the formula: Sum of 9 binary tests (0 or 1 each). compare against sector median on /screener with the Sector filter applied. ValueMarkers refreshes the calculation within 24 hours of each new SEC filing using SEC EDGAR 10-K + 10-Q filings (segment-level disclosures).
What is a good ROIC Consistency value by sector?+
There is no single 'good' value for ROIC Consistency — context is sector-driven. compare against sector median on /screener with the Sector filter applied. The /screener exposes sector-relative percentiles for ROIC Consistency on every ticker, so you can compare against the sector median rather than the broad-market median.
Which investors use ROIC Consistency?+
Charlie Munger, Joel Greenblatt, Terry Smith cite ROIC Consistency as a key input to to find compounders with durable economic moats. The academic anchor is Greenblatt (2005) Magic Formula and Mauboussin (2014). ValueMarkers weights this within the Quality pillar of the VMCI score (30% of total).
What are the limitations of ROIC Consistency?+
ROIC Consistency can mislead in asset-light businesses where conventional capital ratios mislead. Pair ROIC Consistency with at least two cross-checks from other VMCI pillars — for example, free cash flow trend, balance-sheet quality, and earnings consistency — before drawing a single-metric conclusion.
Where can I see live ROIC Consistency data?+
Visit any /stock/[ticker] page on ValueMarkers to see live ROIC Consistency data, sector percentiles, and the VMCI composite score that integrates ROIC Consistency with 119 other indicators across 100,000+ stocks. The free /screener exposes ROIC Consistency as a filterable column.
Used in these guides
- Auto Tariff Risk Stock Valuation: What the Data Tells Value Investors
- How to Find the Z Score Using Excel: Answers to the Most Common Questions
- United Healthcare Stock Price: An In-Depth Analysis for Serious Investors
- How to Master Piotroski F Score Stock Screener [Step-by-Step Guide]
- Nasdaq Nvda Financials Explained: A Clear Guide for Investors
Related Quality Indicators
Return on Equity (ROE)Op Margin
Return on Equity measures how efficiently a company converts capital into earnings.
Return on Assets (ROA)Net Margin
Return on Assets is the metric used to how efficiently a company converts capital into earnings.
Return on Invested Capital (ROIC)EBITDA Margin
Return on Invested Capital measures how efficiently a company converts capital into earnings.
Return on Capital Employed (ROCE)FCF Margin
Return on Capital Employed is the metric used to how efficiently a company converts capital into earnings.
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