6.2·6 min read
Checks That Catch Errors
A few automated checks - does it balance, does cash tie - catch most modeling mistakes instantly.
By the end you can
- ✓Add a balance check to a model
- ✓List the tie-outs that validate a build
- Does it balance? Assets - Liabilities - Equity must equal zero every period.
- Does cash tie? ending cash must equal the cash line.
- Roll-forwards consistent? Each ending balance equals the next beginning balance.
- Sanity-check margins, growth, and ratios - do the outputs look like a real business?
Make the check loud
Professionals put a balance-check row at the top of the model that turns red the instant it is non-zero. Catching the break the moment it happens is far cheaper than hunting it down later.
Check yourself
Your balance check shows Assets - Liabilities - Equity = 5. What does it mean?
Practice in the simulator
Lock it in by building it yourself in a live, graded spreadsheet.