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Back to the track — Financial Planning Analyst
The model starts with 1,200,000.00 cash, 430,000.00 operating flow, negative 600,000.00 investing and 250,000.00 financing, so closing cash must be 1,280,000.00. Management hard-codes closing cash, debt and interest and does not link a 1,200,000.00 asset to 240,000.00 depreciation or profit to retained earnings. Build roll-forwards, control circularity and expose any balance difference without a plug.
A three-statement model links income, financial position and cash flow through economic entries and the accounting equation. Revenue may increase receivables before cash and affect tax or contract liabilities; capex raises an asset and reduces cash or increases debt before depreciation reaches profit. Build movement schedules and derive closing balances from opening plus movements. If one assumption does not propagate through all affected statements, the model is adjacent rather than integrated.
Load closed historical periods and tie profit, cash flow, closing cash and balances to issued statements or ledger. Each period must satisfy assets less liabilities and equity. Net income flows to retained earnings after dividends and direct equity movements, not automatically. Profit of 1,200,000.00 with 400,000.00 dividends adds 800,000.00 before other equity items, preserving a transparent roll-forward.
Forecast receivables, inventory and payables from operating drivers consistent with the income statement. Receivables follow credit sales and collection timing, inventory follows cost or units, and payables follow purchases and supplier terms. Cash flow uses the movement, not the balance: receivables rising from 2,000,000.00 to 2,600,000.00 consumes 600,000.00. Keep taxes, advances and contract liabilities on their own timing schedules rather than forcing them into unsuitable day ratios.
Build property and equipment by class or project from opening gross cost and accumulated depreciation, additions, disposals and depreciation based on cost, life, residual and in-service date. Capex cash leaves on payment, while depreciation is non-cash expense and reduces carrying value. Do not forecast depreciation as a revenue percentage when the asset register exists. Separate disposal proceeds from book gain or loss; a 1,200,000.00 asset over five years gives 240,000.00 full-year depreciation before start-date convention.
Debt rolls from opening through drawdowns and repayments, with interest calculated on a disclosed timing basis. Cash need, debt, interest, profit and cash can create circularity. Resolve it through controlled iteration, a disclosed average-balance approximation or a clear period-end draw convention. Enforce facilities, covenants and maturities. If required borrowing exceeds a 500,000.00 limit, show a funding gap rather than inventing unauthorised debt.
The treatment starts from these documents. Follow the numbers to identify recognition date, amount, counterparty, reference and approval evidence before preparing the entry.
Facts and supporting evidence
Credit sales of 500,000.00 were delivered and remain uncollected.
Correct treatment and entry
| Account | Debit | Credit |
|---|---|---|
| Trade receivables | 500,000.00 | |
| Revenue | 500,000.00 | |
| Total (SAR) | 500,000.00 | 500,000.00 |
Treatment and financial effect
It links income to receivables and cash only on collection.
Reperformance starts from this case's own facts: Credit sales of 500,000.00 were delivered and remain uncollected. Obtain the original source that proves this event. The training drawings Three-statement cash bridge, Balance-sheet integrity check explain field shape and reading order; they do not replace the case document or transfer their figures into it. Match entity, period, currency, reference and version to approved actuals, budget, its drivers and the source of every assumption, then confirm that the source supports the debit side (Trade receivables) and the credit side (Revenue). Missing ownership, date, reference or approval remains an open exception; a balancing journal or undocumented assumption does not cure it.
Remeasure from the facts before reading the proposed journal, then add it independently: total debits 500,000.00 and total credits 500,000.00. Debit detail: Trade receivables for 500,000.00. Credit detail: Revenue for 500,000.00. Link every line to the recognition or measurement rule explained in the lecture, then trace its reference and posting date. After posting, test model checks, version control and three-statement linkage. Equal sides prove arithmetic only, not the correct account, period or classification.
Before close, compare the correct treatment with the common alternative and record its specific effect: Cash is overstated and receivables understated by 500,000.00. Do not close until the journal agrees with the forecast, variance analysis and management decision report and an independent reviewer can move from balance to account, reference and this event's own source. Keep the calculation, source version, journal identifier, reconciliation result and unresolved exceptions in the same workpaper. An attached file without a stated conclusion is not review evidence.
The model loads history from a closed trial balance and asset, debt and tax schedules with account, period and currency identifiers. Inputs, formulas and outputs are separated, balance, cash and equity checks remain visible, scenarios change assumptions rather than balances, and iterative circularity has limits and convergence logging.
Build a model from 1,200,000.00 opening cash through 430,000.00 operating, -600,000.00 investing and 250,000.00 financing to 1,280,000.00 closing cash, then close the balance sheet.
Work output: A written analysis
These are yours once downloaded, and need no account. Fill them with your own figures and keep them in your portfolio.
Use the bridge to prove closing cash before any scenario or financing decision.
Link operating assumptions through all three statements in eight decisions.
What you haveHistory does not balance.
The arithmetic in this case runs in the tool itself, which is open to you any time with your own figures.
Log untied history, hard-coded balances, schedules not tying to ledger, wrong cash signs, unconverged circularity, facilities beyond limits, unknown plugs and scenarios running on failed checks.
This is not sent anywhere and not stored here. Write it down for yourself — in the workpaper you downloaded, or on paper.
A three-statement model passes every assumption through movement schedules into income, position and cash flow and closes cash, equity and the accounting equation. Working capital, assets, debt and tax have schedules, circularity is controlled, and checks expose missing links rather than hide them with plugs.
How do you link 1,200,000.00 opening cash, 430,000.00 operating, -600,000.00 investing and 250,000.00 financing and prove 1,280,000.00 is not a plug?
Answer every question. Getting them all right records this lesson; you may retry as often as you need.
Reading alone records nothing.
The complete applied walkthrough is available below while the recording is prepared.
Begin with closed balanced history. Link credit sales through receivables to collection, a 1,200,000.00 asset through 240,000.00 depreciation, and debt through draw, interest and facility limit. Cash bridge is 1,200,000.00 plus 430,000.00 operating minus 600,000.00 investing plus 250,000.00 financing equals 1,280,000.00. It ties to the balance sheet rather than being hard-coded. Any balance error or facility excess remains a warning or funding gap, never other assets or automatic debt.
Separate accounting tax expense, cash tax and payable. Pre-tax profit may not equal the tax base, payment can lag, and temporary differences may matter. Dividends are equity and financing decisions, not income-statement expense; they reduce retained earnings and cash according to declaration and payment. Avoid automatic payout where cash or covenant decisions govern. Every movement needs one income effect, one balance effect where applicable, and one cash-flow explanation.
Indirect cash flow starts from net income, adds non-cash items, working-capital movements, investing and financing, and must equal the movement in balance-sheet cash. Do not forecast operating cash independently and plug receivables. Link depreciation, interest, working capital and capex to their schedules. Opening cash 1,200,000.00 plus 430,000.00 operating, minus 600,000.00 investing and plus 250,000.00 financing closes at 1,280,000.00; anything else is a broken link or sign.
Expose checks on the model front page: balance sheet, cash-flow cash, retained earnings roll-forward, debt limits, asset schedules and required reconciliations. Show actual differences, not only TRUE. Scenarios cannot run on a broken base. A 0.01 rounding residual may be tolerable; 75,000.00 is not. Any legitimate balancing mechanism such as debt or cash must be explicit and constrained, never an automatic other-assets plug.
Back-test on a historical period not used to fit assumptions. Test collection days, depreciation and unit-to-inventory relationships without forcing every result through manual overrides. Separate and lock inputs, formulas and outputs, use consistent units and dates, and maintain one assumptions register with source, owner and update date. An output containing hard-coded values is not reviewable or scenario-ready.
Before approving investment, valuation or funding, ensure the base balances, history ties, drivers are defensible, and cash gaps and covenants are visible. Sensitivity is unreliable when interest circularity is unstable or an unknown plug moves cash. An incomplete model may support exploration if limitations are explicit, but not a final decision. The model must reveal when cash runs out and which decision precedes that point.
Facts and supporting evidence
An in-service asset was purchased for cash at 1,200,000.00.
Correct treatment and entry
| Account | Debit | Credit |
|---|---|---|
| Property and equipment | 1,200,000.00 | |
| Cash | 1,200,000.00 | |
| Total (SAR) | 1,200,000.00 | 1,200,000.00 |
Treatment and financial effect
It places investment in the asset and investing cash before depreciation.
Reperformance starts from this case's own facts: An in-service asset was purchased for cash at 1,200,000.00. Obtain the original source that proves this event. The training drawings Three-statement cash bridge, Balance-sheet integrity check explain field shape and reading order; they do not replace the case document or transfer their figures into it. Match entity, period, currency, reference and version to approved actuals, budget, its drivers and the source of every assumption, then confirm that the source supports the debit side (Property and equipment) and the credit side (Cash). Missing ownership, date, reference or approval remains an open exception; a balancing journal or undocumented assumption does not cure it.
Remeasure from the facts before reading the proposed journal, then add it independently: total debits 1,200,000.00 and total credits 1,200,000.00. Debit detail: Property and equipment for 1,200,000.00. Credit detail: Cash for 1,200,000.00. Link every line to the recognition or measurement rule explained in the lecture, then trace its reference and posting date. After posting, test model checks, version control and three-statement linkage. Equal sides prove arithmetic only, not the correct account, period or classification.
Before close, compare the correct treatment with the common alternative and record its specific effect: Assets and profit are understated by 1,200,000.00 before depreciation. Do not close until the journal agrees with the forecast, variance analysis and management decision report and an independent reviewer can move from balance to account, reference and this event's own source. Keep the calculation, source version, journal identifier, reconciliation result and unresolved exceptions in the same workpaper. An attached file without a stated conclusion is not review evidence.
Facts and supporting evidence
Annual depreciation of 240,000.00 accrued on the asset.
Correct treatment and entry
| Account | Debit | Credit |
|---|---|---|
| Depreciation expense | 240,000.00 | |
| Accumulated depreciation | 240,000.00 | |
| Total (SAR) | 240,000.00 | 240,000.00 |
Treatment and financial effect
It reduces profit and carrying value and is added back as non-cash.
Reperformance starts from this case's own facts: Annual depreciation of 240,000.00 accrued on the asset. Obtain the original source that proves this event. The training drawings Three-statement cash bridge, Balance-sheet integrity check explain field shape and reading order; they do not replace the case document or transfer their figures into it. Match entity, period, currency, reference and version to approved actuals, budget, its drivers and the source of every assumption, then confirm that the source supports the debit side (Depreciation expense) and the credit side (Accumulated depreciation). Missing ownership, date, reference or approval remains an open exception; a balancing journal or undocumented assumption does not cure it.
Remeasure from the facts before reading the proposed journal, then add it independently: total debits 240,000.00 and total credits 240,000.00. Debit detail: Depreciation expense for 240,000.00. Credit detail: Accumulated depreciation for 240,000.00. Link every line to the recognition or measurement rule explained in the lecture, then trace its reference and posting date. After posting, test model checks, version control and three-statement linkage. Equal sides prove arithmetic only, not the correct account, period or classification.
Before close, compare the correct treatment with the common alternative and record its specific effect: Cash and accumulated depreciation are understated by 240,000.00. Do not close until the journal agrees with the forecast, variance analysis and management decision report and an independent reviewer can move from balance to account, reference and this event's own source. Keep the calculation, source version, journal identifier, reconciliation result and unresolved exceptions in the same workpaper. An attached file without a stated conclusion is not review evidence.
Facts and supporting evidence
500,000.00 was drawn from an approved facility to cover a cash gap.
Correct treatment and entry
| Account | Debit | Credit |
|---|---|---|
| Cash | 500,000.00 | |
| Loan payable | 500,000.00 | |
| Total (SAR) | 500,000.00 | 500,000.00 |
Treatment and financial effect
It links financing to cash and debt without immediate profit.
Reperformance starts from this case's own facts: 500,000.00 was drawn from an approved facility to cover a cash gap. Obtain the original source that proves this event. The training drawings Three-statement cash bridge, Balance-sheet integrity check explain field shape and reading order; they do not replace the case document or transfer their figures into it. Match entity, period, currency, reference and version to approved actuals, budget, its drivers and the source of every assumption, then confirm that the source supports the debit side (Cash) and the credit side (Loan payable). Missing ownership, date, reference or approval remains an open exception; a balancing journal or undocumented assumption does not cure it.
Remeasure from the facts before reading the proposed journal, then add it independently: total debits 500,000.00 and total credits 500,000.00. Debit detail: Cash for 500,000.00. Credit detail: Loan payable for 500,000.00. Link every line to the recognition or measurement rule explained in the lecture, then trace its reference and posting date. After posting, test model checks, version control and three-statement linkage. Equal sides prove arithmetic only, not the correct account, period or classification.
Before close, compare the correct treatment with the common alternative and record its specific effect: Profit is overstated and liabilities understated by 500,000.00. Do not close until the journal agrees with the forecast, variance analysis and management decision report and an independent reviewer can move from balance to account, reference and this event's own source. Keep the calculation, source version, journal identifier, reconciliation result and unresolved exceptions in the same workpaper. An attached file without a stated conclusion is not review evidence.