Starter course

Finance · Understanding financial basics

How to read financial statements: the basics

How to read financial statements, in six short lessons: what they are and who publishes them, the income statement, the balance sheet, the cash flow statement, key ratios and annual reports, and finding real filings. One fictional bike shop runs through every example, with personal and small-business versions.

What you'll cover

What financial statements are and who publishes themThe three main statements and what each one answers, how a household has its own versions, and which businesses must publish accounts in the US, UK and Australia.
The income statement: revenue, costs and the bottom lineReading an income statement from top to bottom: revenue, cost of sales, gross profit, operating expenses, depreciation, interest, tax, net income and earnings per share.
The balance sheet: assets, liabilities and equityThe balance sheet equation, current and long-term items, what equity means, and how to build your own personal balance sheet.
The cash flow statement: why profit isn’t cashOperating, investing and financing cash flows, why a profitable business can run short of cash, and how a cash flow forecast helps small businesses and households.
Key ratios in plain words, and how to read an annual reportOperating margin, debt-to-equity, working capital, the current ratio, inventory turnover and P/E, with what each shows and its limits, plus the footnotes and management’s discussion.
Finding real filings, the limits of statements and where to get helpFinding company filings on SEC EDGAR, Companies House and through ASIC and the ASX, small business health checks, what statements can’t tell you, and when to see a licensed professional.

General information only, not financial, credit, tax or legal advice. It doesn’t take into account your objectives, financial situation or needs, and trainyourself.org doesn’t recommend any financial product or provider. Consider getting advice from a licensed professional before you act.

trainyourselfAI course guide · scripted lessons

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About this course

the basics.

Starter · About 1 hour of learning · 6 lessons · 13 quick checks · 1 download

Who it's for
Adults in Australia, the UK, the US and elsewhere who want to read a company’s or small business’s accounts, or apply the same ideas to their own money.
How it works
6 guided lessons in your browser, with worked examples, exercises and a quick check after each lesson. Progress is saved in this browser only, and you can restart at any time.
Sources we rely on
26 published sources, mostly regulators and official bodies, listed below so you can check the original guidance yourself.

By the end you can

Name the three main financial statements, what each shows, and the personal version of each
Read an income statement from revenue to net income and explain gross profit and EPS
Use assets = liabilities + equity to read a balance sheet and build your own
Explain why profit and cash differ using a cash flow statement
Calculate common ratios, read the notes, and find filings on EDGAR, Companies House and through ASIC and the ASX

Downloads

Statement reading worksheet .xlsxA fictional company’s income statement, balance sheet and cash flow statement linked by formulas, with the five ratios worked out, a what-if tab, and personal balance sheet and cash flow tabs for your own figures.

Rules by country

Australia: ASIC oversees financial reporting under the Corporations Act and runs the company registers; listed company results, annual reports and announcements are on the ASX website (Moneysmart); business.gov.au templates for profit and loss, balance sheet and cash flow, plus ATO small business benchmarks.
United Kingdom: Limited companies send statutory accounts (balance sheet, profit and loss account, notes) to Companies House; anyone can search the register; small and micro companies may file abridged accounts (size thresholds volatile); keep company and personal finances separate (GOV.UK).
United States: SEC Beginners’ Guide to Financial Statements for the three statements, footnotes, MD&A and ratios; public company 10-K, 10-Q and 8-K filings on EDGAR (Investor.gov); SBA guidance on small business balance sheets; Investor.gov net worth statement for personal finances.

Learning time

About 1 hour of learning. May count towards your CPD or professional development; check your professional body's rules. Estimated from reading time, exercises, quick checks and downloads.

Sources

Check the originals.

Drafted with AI assistance and run through automated quality and source checks. How these courses are made. Spotted an error or out-of-date rule? Send a correction.

General information only, not financial advice. We don't recommend financial products.

Beginners’ guide to financial statements · US Securities and Exchange Commission
Using EDGAR to research investments · Investor.gov (US Securities and Exchange Commission)
Form 10-K (glossary) · Investor.gov (US Securities and Exchange Commission)
Figure out your finances (net worth statement) · Investor.gov (US Securities and Exchange Commission)
Manage your finances · US Small Business Administration
Prepare annual accounts for a private limited company · GOV.UK
Annual accounts: micro-entities, small and dormant companies · GOV.UK
Running a limited company: company and accounting records · GOV.UK
Get information about a company · GOV.UK (Companies House)
Find and update company information · Companies House (UK)
Financial reporting and audit · ASIC (Australia)
Search ASIC registers · ASIC (Australia)
Choosing shares to buy · Moneysmart (ASIC, Australia)
Set up a profit and loss statement · business.gov.au (Australian Government)
Set up a balance sheet · business.gov.au (Australian Government)
Set up a cash flow statement · business.gov.au (Australian Government)
Review your financial health · business.gov.au (Australian Government)
Financial advisers register · Moneysmart (ASIC, Australia)
TPB Register: check if your tax or BAS agent is registered · Tax Practitioners Board (Australia)
National Debt Helpline · National Debt Helpline (Australia)
Australian Financial Complaints Authority · AFCA (Australia)
How to check a firm or individual is authorised · Financial Conduct Authority (UK)
Get free debt advice · GOV.UK
Working with an investment professional · Investor.gov (US Securities and Exchange Commission)
Choosing a tax professional · Internal Revenue Service (US)
What is credit counseling? · Consumer Financial Protection Bureau (US)

Publisher

Who publishes this course.

Published by trainyourself.org, a trading name of Combine TRS Pty Ltd (ABN 42 112 983 678), Brisbane, Australia.

How it's made: drafted with AI assistance from published regulator, government and official money guidance, then run through automated quality checks against our course depth standard and automated source checks that match each rule to its official source, listed above. The course guide is an AI presenter and is labelled as one. Read how these courses are made.

Last updated: 26 October 2026

General information only, not financial, credit, tax or legal advice. Spotted an error or an out-of-date rule? Send us a correction.

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How to read financial statements: the basics

the basics.

Who it's for

How it works

Sources we rely on

By the end you can

Downloads

Rules by country

Learning time

Check the originals.

Who publishes this course.

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