Definition
A balance sheet is a snapshot of assets, liabilities, and equity at a point in time. Working capital items (AR/AP/deferred revenue) live here.
How to use it
- Balance sheet changes explain many cash surprises (AR growth consumes cash).
- Use it with the cash flow statement to connect profit to cash reality.
Measured as
Measure Balance Sheet with the same date, unit basis, and accounting or policy definitions used in the rest of your model.
Operator takeaway
- Balance sheet changes explain many cash surprises (AR growth consumes cash).
- Use it with the cash flow statement to connect profit to cash reality.
- Tie Balance Sheet to the same balance-sheet date, scenario, and decision memo you are using elsewhere in the model.
- Document which claims, costs, or adjustments your team includes before comparing numbers across forecasts, covenants, or valuation work.
Next decision
- Read Cash conversion cycle: turn working capital into runway if the decision depends on interpretation, policy, or trade-offs beyond the raw formula.
- Decide whether Balance Sheet belongs in cash planning, valuation, or debt monitoring so the number is used in the right model.
Where to use this on MetricKit
Guides
- Cash conversion cycle: turn working capital into runway: A practical guide to the cash conversion cycle (CCC): how AR/AP timing changes cash, how to reduce days outstanding, and why runway depends on working capital.
- Runway and burn: gross vs net burn, working capital, and cash levers: A practical guide to runway: compute net burn, understand why cash differs from profit, and how working capital and collections change runway.