Test the story against the notes
See this course’s project requirements
A checked financial brief with statement scope, margins, cash reconciliation, liquidity ratios, note questions and a spending recommendation.
Keep your working files in your own notebook or software. Save a private description, checklist, and work link in My Proof.
What to include
- A dated statement map with checked balance-sheet totals.
- A two-year gross and operating margin comparison. A profit-to-cash bridge that reconciles to closing cash.
- A liquidity note with working capital and two coverage ratios.
- A note-review log with quantified risks and follow-up questions.
- A one-page financial brief supporting a conditional spending decision.
Review and revise
Use these criteria to check your work and choose what to improve.
- Calculations reconcile to the supplied records, with units and dates labeled.
- Assumptions and missing information are visible, including the changed scenario.
- The recommendation follows the evidence and explains an important limitation.
- The six lesson outputs form a usable handoff that another learner can check.
Want more background?
The idea in everyday life
Fictional Cedar Print notes: one customer provides 40% of Year 2 revenue; $1200 of receivables is over 90 days old; no allowance has yet been recorded for that balance; equipment life estimate changed this year. These are practice facts, not accounting recommendations.
Notes can reveal concentrations and estimates that totals hide. Separate evidence from questions.
Test the story against the notes — worked practice
Notes can reveal concentrations and estimates that totals hide. Separate evidence from questions.
Fictional Cedar Print notes: one customer provides 40% of Year 2 revenue; $1200 of receivables is over 90 days old; no allowance has yet been recorded for that balance; equipment life estimate changed this year. These are practice facts, not accounting recommendations.
1. Quantify concentration
Multiply Year 2 revenue of $50,000 by 40%.
You should see: One customer accounts for $20,000 revenue.
A percentage becomes clearer as a dollar exposure.
2. Locate uncertainty
Compare overdue receivables with total receivables of $4500.
You should see: About 26.7% of receivables is over 90 days old.
An overdue balance is a risk, not proof of total loss.
3. Draft two questions
Ask how collectibility was assessed and how the equipment estimate affected depreciation.
You should see: Both questions identify specific missing evidence.
Do not invent an adjustment or accuse someone of fraud.
4. Tag statements
Label concentration as FACT and future payment as UNKNOWN.
You should see: The report distinguishes supplied evidence from assumptions.
A useful analysis states what cannot yet be concluded.
What to finish
A note-review log with quantified risks and follow-up questions.
Watch for this
Treating an overdue invoice as a proven write-off without evidence.
How can I tell I understand it?
Explain your calculation or classification and reproduce the changed case without copying the worked result.
Quick knowledge check
Answer all 3 questions. Get at least 2 right and the lesson completes automatically.
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Answer all 3 questions above and get at least 2 right. You can review the explanations and try again.
Go to the knowledge checkOptional course overview video · same video as Lesson 1
How the Income Statement and Balance Sheet are Connected | Example
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Source & access notes · checked 2026-09-12
Inspected statement definitions, operating cash flow, notes, margins and working capital.
Access: Public page inspected without a sign-in; linked services may have separate requirements.
Reuse: Link to the original. Free reading does not imply permission to reproduce the page; lessons and fixtures here are original.
Source & access notes · checked 2026-09-12
Inspected purposes, comparison methods and ratio analysis.
Access: Public article inspected; linked HBS programs are paid and are not required.
Reuse: Link to the original. Free reading does not imply permission to reproduce the page; lessons and fixtures here are original.
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