How the three statements actually link together
The income statement drives everything: revenue and COGS come first, and everything below them — SG&A, D&A, interest, tax — lands at net income. But net income alone doesn't tell you what happened to cash, because accounting profit and cash are different things. That's what the other two statements are for.
The balance sheet's working-capital lines (receivables, inventory, payables) are driven off the income statement — via days-based ratios here, the standard method — and PP&E rolls forward from CapEx and D&A. The cash flow statement then reconciles net income back to actual cash: add back D&A (a non-cash charge), subtract the cash tied up in a growing balance sheet (more receivables and inventory means less cash on hand, even as revenue and profit grow), and layer in CapEx and any debt repayment. The result — the change in cash — is what makes next year's opening cash balance, closing the loop back into the balance sheet.
The balance check above is the actual proof this is a real linked model rather than three unrelated tables: assets should equal liabilities plus equity in every single year, because of how the mechanics above are built — a net income that increases equity is exactly matched, pound for pound, by the change in assets and liabilities it drives. If that check is ever non-zero in a spreadsheet you built by hand, something in the linkage is broken; this tool is built so it can't be.
Where this model is honest about its limits
This assumes a flat revenue growth rate, a single debt tranche with a fixed annual repayment (no revolver or cash sweep), no dividends or share buybacks, and no seasonality. Real 3-statement models — the kind behind an actual "Tesco vs. Diageo" comparison — build revenue up from volume and price by segment, model working capital by product line, and add a revolving credit facility that draws or repays automatically to keep a minimum cash balance. This tool is the mechanical skeleton that every one of those more detailed builds sits on top of.