Albeit of its rising stock price in the previous
period, growth firms are very likely to experience
low earnings and negative cash flow; consequently,
any firm currently generating positive cash flows or
more profits than its counterparts displays a signal
of improving profitability and should earn a score
of 1. For value firms, given the poor historical
earnings performance, any firms generating positive
profits or cash flows are demonstrating stronger
financial health in the future, with positive cash