If you were to build a dynamic 3-statement financial projection that balanced, how would you build the model using a fixed cash balance? How would you build the model using a changing cash balance?

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Kruze Consulting Startup Q&A Author
Vanessa Kruze
Founder, CPA

You want the Cash Balance to be dynamic. Hard plugging something like that will get you in a lot of trouble as you start making changes.

The Cash Flow Statement will drive the Cash Balance on the Balance Sheet. Let the changes in Working Capital on the Balance Sheet flow into the Cash Flow Statement. Then use the Cash at the End of Period (last line of the Cash Flow Statement) to flow into Cash on Balance Sheet.

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