Every model needs a sign rule, stated once and followed everywhere. On a cash flow statement the usual rule is cash in is positive, cash out is negative. Capital spending, debt repayment and dividends show as negative numbers, and the net change in cash is a plain SUM. Supporting schedules often list those amounts as positive figures, so the link flips the sign: =-B12.
Working capital follows the same logic. When receivables or inventory go up, cash is tied up, so the cash flow line is negative: last year minus this year. When payables go up, you have held on to cash, so the line is positive.
Good models also check themselves:
- A balance check: total assets minus total liabilities and equity,
=ROUND(B11-B17,2), which should read 0 in every year. ROUND hides tiny leftovers from decimal arithmetic.
- A summary flag at the top that reads OK only when every check passes, so a problem shows from the first screen.