Equity roll-forward
Share capital and retained earnings.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: equity roll-forward.Updated 30 September 2026
What it does
The bridge from the income statement to the balance sheet. Retained earnings open at last year’s close, add net income, subtract dividends and buybacks, and close. Share capital moves only when shares are issued or repurchased. Without this schedule the balance sheet cannot balance, which is why it is the first place to look when it does not.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Assumptions, row 40: Dividend payout, % of net income
- Income Statement, rows 28–29: Dividends, Retained for the year
- Equity, rows 6–12: Share capital, Retained earnings, opening, Net income, Dividends…
What a reviewer looks for
- Dividends deducted here but not shown as a financing cash outflow, or the reverse.
- Net income taken from the wrong year.
Learn it, then build it
Build · Lab · ~8 min
Three-Statement Linker
Walk any event through all three statements in the right order, with the right signs, and prove the balance sheet balances rather than asserting it.
Read · Guide · 7 min
"Walk Me Through the Three Statements" — And Every Follow-Up
Read · Guide · 13 min
How to Build a Three-Statement Model That Actually Balances
Vocabulary: The Three Financial Statements.