The following describes a simple example of the principles of implementing a dynamic adjustment. The assumption used (for the criteria to check) is that the cash amount on the Balance Sheet must never be negative, and that – in order to avoid this – an additional injection of cash (equity) would be made in order to do so.

Therefore, the model first calculates the interim cash balances that would result from the base assumptions, and use this to check whether (and how much) additional financing is required. It is then implicitly assumed that this financing activity takes place, so that the final cash balances can then be calculated.

The following image shows the calculations for the interim cash balances (prior to any adjustments), as well as the amount of adjustment required to the financing:

- Row 9 contains the initial cash flow (i.e. prior to any new injection).
- Rows 12-14 use a corkscrew to calculate the interim cash balances (shown on row 14) based on the initial owners’ equity and the initial cash flow.
- Row 16 calculates the cash injection that is required. That is, it applies an IF function to the interim cash balance (in row 14), to determine if (and how much) additional financing is necessary: