From the course: Financial Modeling Foundations

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Validating the Model

Validating the Model

From the course: Financial Modeling Foundations

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Validating the Model

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- [Instructor] Once we've filled in our full 3 Statement Model, we should go through and we should do some checks to make sure that there's not any errors or obvious problems. I'm in the 02_07_Begin file. So the most obvious check that we need to do is to go through and look at total assets versus total liabilities and shareholders equity and make sure these two things balance. And we can see that they do balance, but it's often helpful to go through and add an error line in here. So I'm gonna add balance sheet balance, and then we're gonna say =IF total assets are equal to liabilities and shareholders equity, then OK, comma, otherwise ERROR. We see this says OK, and we can see that right across. But now if we make any changes to the model, then we'll know right away if there's a problem that comes up. All right, now we've gone through and I've made some adjustments, I've cleaned some things up since the…

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