Technical check and brief artifact task on trustworthiness and communication
Check Your Links and Defend the Model
Prove your workbook is trustworthy. Answer the technical questions below, then write a short explanation of how your three statements connect.
1. Best practice for mapping AccountID to StatementLine?
2. Which validation proves the cash flow statement ties to the balance sheet?
3. What breaks first when using fixed ranges like C2:C200?
4. Cleanest way to route logic for Base/Stretch/Conservative?
5. Where should audit flags live for investor confidence?
6. Which rollup pattern is correct for COGS?
7. If Assets − (Liabilities + Equity) = 1.25, what should your model do?
8. Best way to document assumptions for investors?
Write a short memo (4–6 sentences) to Sarah explaining how her three-statement model works. Your memo should answer these questions:
- Which two numbers flow between statements, and why do they matter?
- What happens to the Balance Sheet when Revenue increases by $1,000?
- How do the integrity checks prove the model is correct?
- What would you tell an investor who asks, “How do I know these numbers are reliable?”
Example opening:
“Sarah, your three statements are now connected so that one change flows through the entire model. Net Income from your Income Statement automatically updates Retained Earnings on the Balance Sheet, which means your equity grows as the business earns profit. The Cash Flow Statement ties back to the Balance Sheet cash line, so you can always verify the cash number is consistent...”
Save your memo in the workbook or submit it separately. This is the kind of explanation a financial analyst gives when defending a model to a manager or investor.
Exchange workbooks with a partner and check:
- All three cross-sheet links are present and correct
- Integrity checks all show “OK”
- Changing a number on one tab updates the others
- The memo explains the connections clearly
Give your partner one strength and one suggestion for improvement.