# Common-Size Statements

`D18-F01-A06` · Fundamental Analysis and Valuation → Statement Ratios · archetype `record-transform` · difficulty 3/5 · verification **verified**

Full page: https://docs.thefintechbuilder.com/fundamental-analysis-and-valuation/statement-ratios/common-size-statements/
Agent skill: `npx skills add IslamBaraka90/Fintech-Algorithms-Library` — https://docs.thefintechbuilder.com/guides/agent-skill/

## Install and import

```bash
npm install fintech-algorithms
```

```ts
import { commonSizeStatements } from "fintech-algorithms/fundamental-analysis-and-valuation/statement-ratios/common-size-statements";
```

## Signature

```ts
commonSizeStatements(input)
```

Divides every line item of each period by that period's own base line to give common-size percentages, and tracks one focus line's percentage and its change in percentage points against the previous period.

## Parameters

| Name | Type | Required | Notes |
| --- | --- | --- | --- |
| `input` | `{ statement_type: string; base_label: string; focus_label: string; periods: { period: string; items: { label: string; value: number }[] }[] }` | yes | A plain object. `statement_type` must be `income` or `balance` and governs whether a negative base is allowed. `base_label` names the row every value is divided by and `focus_label` names the row that is tracked across periods; both must exist in every period. `periods` is an array of at least two objects, each with a nonempty `period` string and an `items` array of at least four rows carrying a unique nonempty `label` and a finite `value`, in the same order in every period. |

## Returns

`{ statement_type: string; base_label: string; focus_label: string; period_count: number; line_item_count: number; focus_percentage: number; focus_change_pp: number; periods: { period: string; base_value: number; focus_percentage: number; focus_change_pp: number | null; items: { label: string; value: number; common_size_pct: number }[] }[]; state: string; reason: string }`

`statement_type`, `base_label` and `focus_label` echo the inputs, and `period_count` and `line_item_count` report how many periods and rows per period were normalized. `periods` carries one entry per input period with its trimmed `period` name, the `base_value` used as the divisor, the focus row's `focus_percentage`, the `focus_change_pp` against the previous period (`null` for the first), and `items` repeating each `label` and `value` alongside its `common_size_pct`. The top-level `focus_percentage` and `focus_change_pp` are the last period's. `state` is always `calculated` and `reason` is `signed-line-items-divided-by-period-base`.

## Errors

- When statement_type is neither income nor balance — throws RangeError
- When base_label or focus_label is not a nonempty string — throws RangeError
- When periods is not an array of at least two entries, an entry is not an object, its period is not a nonempty string, or its items array holds fewer than four rows — throws RangeError
- When an item is not an object, its label is empty or repeats within the period, or its value is not a finite number — throws RangeError
- When two periods do not use the same ordered labels, or a period is missing base_label or focus_label — throws RangeError
- When the base value is zero, or negative when statement_type is balance — throws RangeError

## Complexity

Time `O(n)`, space `O(n)`.

## Worked example

This is the worked example published in the article, replayed by the test suite on every run. The output cannot drift.

### Input

`input`:

```json
{
  "statement_type": "income",
  "base_label": "Revenue",
  "focus_label": "Net income",
  "periods": [
    {
      "period": "FY2023",
      "items": [
        {
          "label": "Revenue",
          "value": 1200
        },
        {
          "label": "Cost of goods sold",
          "value": -720
        },
        {
          "label": "Gross profit",
          "value": 480
        }
      ]
    },
    {
      "period": "FY2024",
      "items": [
        {
          "label": "Revenue",
          "value": 1320
        },
        {
          "label": "Cost of goods sold",
          "value": -805
        },
        {
          "label": "Gross profit",
          "value": 515
        }
      ]
    },
    {
      "period": "FY2025",
      "items": [
        {
          "label": "Revenue",
          "value": 1450
        },
        {
          "label": "Cost of goods sold",
          "value": -899
        },
        {
          "label": "Gross profit",
          "value": 551
        }
      ]
    }
  ]
}
```

### Call

```ts
commonSizeStatements(input)
```

### Returns

object with 10 fields: statement_type, base_label, focus_label, period_count, line_item_count, focus_percentage, focus_change_pp, periods, …

```json
{
  "statement_type": "income",
  "base_label": "Revenue",
  "focus_label": "Net income",
  "period_count": 4,
  "line_item_count": 12,
  "focus_percentage": 8.8125,
  "focus_change_pp": 0.674568965517,
  "periods": [
    {
      "period": "FY2023",
      "base_value": 1200,
      "focus_percentage": 9.416666666667,
      "focus_change_pp": null,
      "items": [
        {
          "label": "Revenue",
          "value": 1200,
          "common_size_pct": 100
        },
        {
          "label": "Cost of goods sold",
          "value": -720,
          "common_size_pct": -60
        },
        {
          "label": "Gross profit",
          "value": 480,
          "common_size_pct": 40
        }
      ]
    },
    {
      "period": "FY2024",
      "base_value": 1320,
      "focus_percentage": 8.787878787879,
      "focus_change_pp": -0.628787878788,
      "items": [
        {
          "label": "Revenue",
          "value": 1320,
          "common_size_pct": 100
        },
        {
          "label": "Cost of goods sold",
          "value": -805,
          "common_size_pct": -60.984848484848
        },
        {
          "label": "Gross profit",
          "value": 515,
          "common_size_pct": 39.015151515152
        }
      ]
    },
    {
      "period": "FY2025",
      "base_value": 1450,
      "focus_percentage": 8.137931034483,
      "focus_change_pp": -0.649947753396,
      "items": [
        {
          "label": "Revenue",
          "value": 1450,
          "common_size_pct": 100
        },
        {
          "label": "Cost of goods sold",
          "value": -899,
          "common_size_pct": -62
        },
        {
          "label": "Gross profit",
          "value": 551,
          "common_size_pct": 38
        }
      ]
    }
  ],
  "state": "calculated",
  "reason": "signed-line-items-divided-by-period-base"
}
```

## Other exports

`dupontDecomposition`, `roicCalculation`, `cashConversionCycle`, `interestCoverageRatio`, `netDebtToEbitda`, `calculate`. Every module additionally exports `run` as an alias of its primary
function, and a `meta` object carrying its catalog id, domain, family, shape and article URL.

## Verification and provenance

Tier: **verified** (via input-expected).

The worked example below is the figure published in this algorithm's article, replayed and asserted by the test suite on every build. The arithmetic cannot drift without the build failing.

Both tiers guarantee the signature. Full explanation: https://docs.thefintechbuilder.com/guides/verification/

Generated from the docs.json payload shipped inside fintech-algorithms@0.13.0.
The signature and parameter list are checked against the compiled implementation at build time,
so a description that contradicts the code fails the build rather than reaching this file.

## Links

- Article (how it works, step by step): https://thefintechbuilder.com/fundamental-analysis-and-valuation/statement-ratios/common-size-statements/
- Implementation source: https://github.com/IslamBaraka90/Fintech-Algorithms-Library/blob/main/src/fundamental-analysis-and-valuation/statement-ratios/common-size-statements/impl.ts
- Package on npm: https://www.npmjs.com/package/fintech-algorithms
- Domain index for agents: https://docs.thefintechbuilder.com/fundamental-analysis-and-valuation/llms.txt