Reference

Formula and accounting reference

The same reference the simulator exposes, without leaving your build.

The accounting equation

Assets = Liabilities + Stockholders' Equity

Account
Dr
Cr

Assets

Cash, receivables, inventory, PP&E

+

Liabilities

Payables, accruals, deferred revenue, debt

+

Stockholders' Equity

+

Contributed Capital

Capital raised from owners

+

Retained Earnings

Beginning RE + net income – dividends

+

Revenues

+

Expenses

+

Net Income = Revenues – Expenses

Formula syntax

=D12Link to another cell
=D5-D7Arithmetic across cells
=SUM(D33:D40)Sum a vertical range
=D10*0.2Apply a rate
=-D42Flip a sign
=(D2/C2)-1Growth rate

Capital expenditures

Cash spent on long-lived assets. Capitalised on the balance sheet rather than expensed on the income statement.

Balance sheet: PP&E ↑ · Cash flow: investing outflow

Depreciation

The periodic allocation of an asset's cost across its useful life. Non-cash, but fully tax deductible.

Income statement: expense ↑ · Balance sheet: PP&E ↓ · Cash flow: add-back

Working capital

Operating assets and liabilities. Growth in receivables and inventory consumes cash; growth in payables and deferred revenue releases it.

Balance sheet: current accounts · Cash flow: operating changes

Deferred revenue

Cash collected before the performance obligation is satisfied. A liability until revenue is recognised.

Balance sheet: liability ↑ · Cash flow: operating inflow

Retained earnings

The cumulative profit a company has kept. Beginning balance plus net income less dividends.

Income statement: net income · Balance sheet: equity

Balance check

Total assets less total liabilities and equity. Anything other than zero means a transaction was recorded on only one side.

Balance sheet integrity