What does the ending cash balance represent in financial modeling?

The ending cash balance in financial modeling is calculated as the sum of the beginning cash balance and the change in cash over the period. This calculation reflects how cash flows generated or used during the period affect the total cash available at the end.

The beginning cash balance represents the amount of cash held at the start of the period, while the change in cash includes all cash inflows and outflows, such as operating income, investments, financing activities, and any other cash transactions. By adding these together, the ending cash balance provides a comprehensive view of the cash resources the company has available after accounting for all changes.

Understanding this relationship is crucial for effective financial planning and analysis, as the ending cash balance impacts liquidity, operational capabilities, and overall financial health of the organization.