three statement consistency checker

The problem

Financial analysis often fails because the three core statements are treated as isolated documents rather than a single integrated system. Manual reconciliation of net income, cash flow, and balance sheet accounts is slow and prone to overlooking subtle double-counting or classification errors.

What it does

• Performs rigorous arithmetic validation to ensure Assets = Liabilities + Equity across multiple periods.
• Reconciles the link between Net Income, Dividends, and Retained Earnings to verify equity integrity.
• Cross-references Cash Flow Statement line items against Balance Sheet changes using the indirect method formula.
• Calculates integrated performance metrics including ROIC, Interest Coverage, and Quick Ratios.
• Identifies if dividends or buybacks are being unsustainably funded by debt rather than operations.

Why this beats prompting it yourself

Generic prompts often miss the specific accounting mechanics required for a full three-statement tie-out. This skill applies a structured audit framework that enforces strict reconciliation rules before proceeding to ratio analysis, ensuring your financial conclusions aren't based on broken data.

Use cases

• Auditing financial models for internal consistency and accounting integrity.
• Evaluating if a company's reported earnings are backed by actual operating cash flow.
• Assessing debt sustainability by linking leverage ratios to cash generation capabilities.
• Identifying liquidity risks by monitoring shifts in working capital accounts.

Known limitations

Requires balance sheet, income, and cash flow data for at least one period. Two periods are needed for trend and change analysis.