fintech-algorithms

Free-Float Factor Calculation

Install and import

bash
npm install fintech-algorithms
ts
import { calculate } from "fintech-algorithms/index-and-benchmark-engineering/governance-and-maintenance/free-float-factor-calculation";

Signature

calculate(data)

Worked example

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

Input

data
{
  "records": [
    {
      "id": "A",
      "issuedShares": 1000000,
      "strategicShares": 280000
    },
    {
      "id": "B",
      "issuedShares": 2000000,
      "strategicShares": 900000
    },
    {
      "id": "C",
      "issuedShares": 500000,
      "strategicShares": 25000
    }
  ],
  "roundingStep": 0.05
}

Call

calculate(data)

Returns

object with 2 fields: results, roundingStep

{
  "results": [
    {
      "id": "A",
      "rawFreeFloat": 0.72,
      "freeFloatFactor": 0.75
    },
    {
      "id": "B",
      "rawFreeFloat": 0.55,
      "freeFloatFactor": 0.55
    },
    {
      "id": "C",
      "rawFreeFloat": 0.95,
      "freeFloatFactor": 0.95
    }
  ],
  "roundingStep": 0.05
}

Diagrams

Free-Float Factor Calculation — article hero
Free-Float Factor Calculation — failure guard
Free-Float Factor Calculation — worked example

Calculation flow

Free-Float Factor Calculation calculation flow 
flowchart LR
    A["Point-in-time inputs"] --> B["Validate units and timing"]
    B --> C{"Contract feasible?"}
    C -->|No| D["Reject with reason"]
    C -->|Yes| E["Calculate Free-Float Factor Calculation"]
    E --> F["Recompute invariants"]
    F --> G{"Checks pass?"}
    G -->|No| D
    G -->|Yes| H["Publish audited output"]
Free-Float Factor Calculation methodology state 
stateDiagram-v2
    [*] --> FrozenInputs
    FrozenInputs --> Validated: contract passes
    FrozenInputs --> Rejected: missing or infeasible
    Validated --> Calculated: apply named rule
    Calculated --> Audited: invariants pass
    Calculated --> Rejected: invariant fails
    Audited --> Published: version and timestamp recorded
    Published --> Revised: approved correction
    Revised --> FrozenInputs: rebuild from retained source state

How it works

This page states the contract — how to call it correctly. The article explains the concept: why it works, and where it breaks.

Read the article →

References