Hi all,
I’ve built over a dozen full 3-statement models from scratch, but I keep making mistakes with how items link, especially when it comes to balance sheet plugs or circular references. I’ve tried using templates and checklists to track things like retained earnings and debt schedules, but something still tends to go wrong. Would love any advice on how to actually internalize the mechanics and catch these errors faster. Should I just practice more or are there any tips for me?
Hey there! It can be super frustrating to keep running into those linking errors after putting in so much work building 3-statement models. I totally get it. While building more models will definitely give you more practice, I think the key here isn't just the quantity but the quality of your practice and how you're approaching it.
Instead of just churning out more models, maybe try really dissecting the logic behind each link. When you build, consciously think about why that specific cell in the income statement flows to that particular spot on the cash flow statement and how that, in turn, impacts the balance sheet. Really try to visualize the flow of funds and how each statement connects.
Also, don't underestimate the power of a second pair of eyes! If you have a study buddy or mentor, even just walking them through your model can help you spot errors you might have overlooked. Sometimes explaining it out loud makes things click.
