Normalizing

The process of adjusting the values depicting the history of a variable so that the variable can be compared to other variables, for example by assigning the value of 100 to the highest number in the history of the time series and 0 to the lowest so that all of the values in between are scaled to this range between highest and lowest. Normalized values for different variables can then be summed as is done in the computation of the State of the Future Index. An example of a normalizing formula is shown below: NV= 100-100*(HV-K)/(HV-LV) Where NV is the normalized value, K is the value of any data point in the series; HV is the highest value, and LV is the lowest value. Thus, when K= HV, NV= 100; when K= LV, NV=0.