A financial modeling plug is when there is a formula that automatically makes the balance sheet balance. It is usually set to be the cash balance or the short-term debt balance and is calculated as the difference between all other assets and liabilities on the balance sheet, excluding this one item. It is highly recommended not to use a plug when building financial models as it will cover up the fact that the model may contain errors in it.
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In order to become a great financial analyst, below are some additional questions and answers for you to explore further:
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