Welcome to our second hidden, bonus tutorial. We don’t openly advertise this one because we like to reward you for paying close attention to your email and opening messages from us.
In this lesson, I’m going to tackle a very common question in interviews and a common point of confusion on the job: how to link the 3 financial statements.
If you’re in “textbook mode” this seems like a very simple question: how hard could it be to link the income statement, balance sheet, and cash flow statement?
The problem is that in the real world, the financial statements are messy and rarely behave exactly as you’d expect them to.
So in this lesson we’ll look at some of these “messier” items, using the example of Chipotle, and you’ll learn both the general rules that apply to normal items and the rules of thumb that you can apply to the more unusual line items.
There’s no universal rule that you can apply to every single line item on the statements, but this lesson should point you in the right direction – with enough practice, you’ll have no difficulty linking the statements together in your own models.