Price & Market BehaviorExtended setlive in productionNew

Ohlson O Score

Updated quarterlyData needs: lowlong onlyshort onlylong short

JAR

1980

J. of Accounting Research

#103 ohlson_o_score — Ohlson 1980 JAR 9-variable logit bankruptcy index.

Citation only, paper link pending.

In plain terms

A bankruptcy logit score that's orthogonal to Altman's Z. We use both — they catch different distress flavors.

How it works

Ohlson 1980 JAR built a 9-variable logit-style index orthogonal to Altman Z. Out-of-sample beats Z for 1-2 year bankruptcy prediction. Hilscher-Wilson 2017 confirm Z and O are both alive in 2000s data and diversify each other. Variables: size, leverage, working capital, current ratio, ROA, CFO/total-liab, two-year-negative-NI flag, technical-insolvency flag, Δ NI scaled.

Live results

32 times picked on its own · 23 times inside a blend (18 beat the stock) · updated 2026-06-06

This strategy is a frequent ingredient in blends that combine a few strategies on one stock. It has contributed to 23 such blended picks (18 of which beat simply holding the stock). Picking it on its own is only one of the ways it shows up.

How its picks scored vs. buy & hold

Each pick is graded on a recent year it was never tuned on, against simply owning the same stock

Where its edge concentrates

Share of picks in each company-size group that beat buy & hold

How often it trades

Active vs. patient. Bars on the left mean it waits for rare setups; bars on the right mean it trades often

Return vs. buy & hold

How much each pick beat or trailed simply owning the stock over the test year (extreme microcap moves trimmed)

Loading substrate evidence…

Data dependencies

Fundamentals quarterly
Quarterly fundamentals (income, balance, cash-flow) from FMP + SEC.

Expected edge

Reported return: Orthogonal to Z; combined yield 5-8% ann.
Tested over: 1970-1976 (in-sample)

Hilscher-Wilson 2017: orthogonal to Z; combined Z+O delivers 5-8% ann. spread.

Related families

Altman Z ScorePrice & Market Behavior

A 5-ratio score that flags bankruptcy risk. High score = safe (long); low score = distressed (short). The market-cap version of the original 1968 formula.

Beneish M Score ShortPrice & Market Behavior

Eight accounting red flags (sales receivables stretching faster than sales, margin compression, asset-quality drift, leverage jumps, accruals piling up) are combined into a single score. When the score crosses the manipulator threshold and the price chart already agrees, that's a short setup.

Piotroski F ScorePrice & Market Behavior

Score each company on 9 boring-but-important accounting checks (positive profit, improving margin, no new shares issued, less debt, etc.). Stocks that pass 7-9 of them are quality compounders; stocks that pass 0-2 are distressed. Long the strong, short the weak.

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