Track D: Chapter 22 — Financial statement analysis toolkit (ratios, trends, variance, common-size)

Makefile

@@ -416,6 +416,10 @@ business-ch20:
 business-ch21:
 	$(PYTHON) -m scripts.business_ch21_scenario_planning_sensitivity_stress --datadir $(OUT_NSO_V1) --outdir $(OUT_TRACK_D) --seed $(SEED)
 
+.PHONY: business-ch22
+business-ch22:
+	$(PYTHON) -m scripts.business_ch22_financial_statement_analysis_toolkit --datadir $(OUT_NSO_V1) --outdir $(OUT_TRACK_D) --seed $(SEED)
+
 
 # --- Quality gates ---
 .PHONY: lint

docs/source/business_ch22_financial_statement_analysis_toolkit.rst

@@ -0,0 +1,81 @@
+Business Statistics & Forecasting for Accountants (Track D)
+===========================================================
+
+Chapter 22 — Financial statement analysis toolkit (ratios, trends, variance, common-size)
+-----------------------------------------------------------------------------------------
+
+This chapter is the "accountant's explainer pack": a small set of repeatable analyses that
+turn monthly statements into decision support:
+
+* **Ratios** — liquidity, leverage, profitability, and efficiency
+* **Trends** — levels + percent changes (with rolling summaries)
+* **Common-size statements** — normalize the income statement to revenue and the balance sheet
+  to total assets so comparisons are apples-to-apples
+* **Variance bridges** — a simple "what drove the change" decomposition month-over-month
+
+The goal is not to "win" with a single metric. It's to build a **defensible story** that
+avoids overclaiming.
+
+Learning objectives
+^^^^^^^^^^^^^^^^^^^
+
+By the end of Chapter 22 you should be able to:
+
+* Compute and interpret a core ratio set (liquidity, leverage, profitability, efficiency).
+* Use common-size statements to explain *composition* changes, not just level changes.
+* Build a simple variance bridge for net income (revenue vs costs).
+* Identify "cosmetic" improvements (profit up, but working capital or cash risk worse).
+
+NSO tables used
+^^^^^^^^^^^^^^^
+
+This chapter uses the NSO v1 synthetic tables:
+
+* ``statements_is_monthly.csv`` — income statement (Sales Revenue, COGS, Operating Expenses, Net Income)
+* ``statements_bs_monthly.csv`` — balance sheet (Cash, AR, Inventory, AP, taxes payable, notes payable, equity)
+* ``statements_cf_monthly.csv`` — cash flow bridge (Net Change in Cash)
+
+How to run
+^^^^^^^^^^
+
+From the repo root:
+
+.. code-block:: bash
+
+   # (Re)generate NSO v1 synthetic data (if needed)
+   make business-nso-sim
+
+   # Run Chapter 22
+   make business-ch22
+
+Outputs
+^^^^^^^
+
+Artifacts are written under ``outputs/track_d/``:
+
+* ``ch22_ratios_monthly.csv`` — monthly ratio panel (liquidity, leverage, margins, working-capital days)
+* ``ch22_common_size_is.csv`` — income statement common-size (percent of revenue)
+* ``ch22_common_size_bs.csv`` — balance sheet common-size (percent of total assets)
+* ``ch22_variance_bridge_latest.csv`` — last month vs prior month net-income bridge components
+* ``ch22_assumptions.csv`` — definitions + guardrails (what each metric means)
+* ``ch22_design.json`` — reproducibility metadata (inputs + definitions)
+* ``ch22_memo.md`` — short interpretation memo
+* ``ch22_figures_manifest.csv`` + ``figures/ch22_fig_*.png`` — figure list + plots
+
+Interpretation guardrails
+^^^^^^^^^^^^^^^^^^^^^^^^^
+
+* **Don't overclaim**: ratios summarize relationships in the data; they don't prove causes.
+* **Watch denominators**: small revenue months can inflate percentages.
+* **Use context**: if net income improves but AR days rise, you may have a collections problem.
+* **Check cash**: profits can improve while cash gets tighter due to working capital.
+
+End-of-chapter problems
+^^^^^^^^^^^^^^^^^^^^^^^
+
+1. **Ratio set**: Compute a ratio panel (liquidity, leverage, profitability, efficiency) for two
+   periods and identify tradeoffs and red flags.
+2. **Common-size comparison**: Produce common-size statements for two periods and explain what
+   changed strategically (mix, cost structure, or investment).
+3. **Variance explanation tree**: Build a simple net income bridge (revenue, COGS, opex) and write
+   a short explanation of the change with operational driver hypotheses.

docs/source/index.rst

@@ -171,5 +171,6 @@ See :doc:`getting_started` and :doc:`contributing` for the contributor workflow.
    business_ch19_cash_flow_forecasting_direct_method_13_week
    business_ch20_integrated_forecasting_three_statements
    business_ch21_scenario_planning_sensitivity_stress
+   business_ch22_financial_statement_analysis_toolkit
    business_appendix_pdf_refresher
    business_appendix_authoring_rules