When Projecting Financial Statements, Don’t Plug Cash To Make The Balance Sheet Balance (March 2016)
When working with historical accounting statements, the balance sheet will balance and tie to the statement of cash flows. If this same accounting approach is used to project financial statements, cash or short-term borrowings on the statement of cash flows are plugged to make that statement foot. But doing so masks errors in the balance sheet projection. In today’s newsletter, I explain why and offer a better way to project cash flow and the balance sheet. Read more…