financial-statement-normalization

Treat each of the last N years of R&D as an investment written off straight line over N years. The capitalize-rd subcommand takes current and past R&D plus an amortizable life and returns the research asset, this year's amortization, and the EBIT adjustment.

Discount the disclosed lease commitments at the pre-tax cost of debt. The capitalize-leases subcommand handles the itemized schedule and the lump-sum thereafter figure, returning lease debt, depreciation, imputed interest, and the EBIT adjustment.

No. The normalize.py script uses only the Python standard library, so it runs anywhere with python3 and no pip installs. Every subcommand reads JSON from stdin or a file and prints JSON.

ROIC usually falls because the capital base rises proportionally more than earnings once the research asset and lease debt are added. If corrected ROIC rises instead, the EBIT leg was applied without the capital leg, which is the most common modeling error.

Do not normalize when the cause is structural: a life-cycle stage, excessive leverage, or a long-term operating problem. Normalization only fits temporary shocks and cyclicality; structural cases need a revenue-driven forecast with a target margin instead.

Capitalizing R&D raises after-tax operating income and net capital expenditure by the same amount, leaving FCFF invariant. To preserve this, add the R&D amortization to depreciation and pass the effective tax rate on corrected EBIT rather than taxing the add-back.