3-Statement Financial Model Balance Check Formula
How a 3-statement financial model links in Excel: net income to retained earnings, cash flow to the balance sheet, and the balance check formula. Free 3-statement model template.
=LET( assets, BS_TotalAssets, liabEquity, BS_TotalLiabilities + BS_TotalEquity, cashLink, BS_Cash - CF_EndingCash, IF(AND(ROUND(assets - liabEquity, 2) = 0, ROUND(cashLink, 2) = 0), "BALANCED", "CHECK: " & TEXT(assets - liabEquity, "#,##0.00")) )
Total assets for the period on the balance sheet.
Integrated 3-Statement Financial Model
Skip writing this formula by hand — download the pre-built Integrated 3-Statement Financial Model workbook with live structured tables, KPI dashboard, and sample data.
The Problem with Standard Excel Approaches
In a three statement model one broken link between the income statement, cash flow statement and balance sheet makes the balance sheet stop balancing, and the error is hard to trace across 60 monthly columns.
How Modern Dynamic Arrays Execute This Formula
Net income from the income statement flows into retained earnings.
Non-cash items and working capital changes build operating cash flow.
Ending cash on the cash flow statement becomes balance sheet cash.
The check confirms assets = liabilities + equity in every period.
Common Excel Errors & How to Fix Them
Solution: Retained earnings = prior RE + net income − dividends.
Solution: Add D&A back in operating cash flow and reduce PP&E by the same amount.