Available modeling methods
| Method / input | Behavior |
|---|---|
| Opening balances | Enter the financial position before the first modeled year. |
| Linked closing balances | Working capital, assets, debt and equity roll forward from their drivers and cash movements. |
Establish a coherent opening position
Use opening-balance controls for cash, receivables, inventory, payables, PP&E, debt, equity and supported other balances. Review the balance status after changes. The model reports Assets minus Liabilities and Equity; a reconciliation difference is not a revenue or expense entry.
Closing positions have cash-flow effects
Working-capital changes affect operating cash flow. Capex and depreciation roll forward PP&E; borrowing and repayments change debt. Net income, equity contributions and distributions roll forward equity. Cash closes the explicit cash-flow reconciliation. A modeled revolver records funding deficits; it is not a bank commitment.
Example: increase DSO
Keep sales constant and raise customer collection days. Receivables rise and cash generation falls, subject to available-flow constraints. Compare the same scenario in both Balance Sheet and Cash Flow rather than entering an offsetting cash amount manually.
Documents the current implemented behavior. Example assumptions are not market data.