How to read financial statements

A beginner's guide to the three financial statements, the income statement, balance sheet and cash flow statement, and how they fit together.

The three statements

Every US public company files three core financial statements with the SEC: quarterly in the 10-Q and yearly in the audited 10-K.

Statement Question it answers Covers
Income statement Did the company make a profit? A period (quarter or year)
Balance sheet What does it own and owe? A single day
Cash flow statement Where did the cash actually go? A period

How they connect

  • Net income from the income statement becomes the starting line of the cash flow statement.
  • Profit that is kept (not paid out) adds to equity on the balance sheet.
  • The change in cash on the cash flow statement equals the change in cash on the balance sheet.

Because they connect, a problem hidden in one usually shows in another. Rising profits with falling cash flow, for example, often means customers are paying slowly.

A five-minute read

  1. Income statement: revenue growth, Gross margin, operating income, diluted EPS.
  2. Balance sheet: cash, debt, and whether equity is growing. See Balance sheet strength: cash versus debt.
  3. Cash flow statement: operating cash flow compared with net income, capex, and Free cash flow.
  4. Notes: share count changes, debt maturities, segment revenue.

Where to find them

On the SEC's EDGAR website, in the investor relations section of the company's site, or on the Research page here, which reads the same SEC filings.

Try it See any company's statements on Research

See also

  • The income statement How to read an income statement line by line, from revenue to earnings per share, and which lines matter most for investors.
  • The balance sheet How to read a balance sheet: assets, liabilities and shareholders' equity, the checks that matter, and how to judge a company's financial health.
  • The cash flow statement How to read the cash flow statement's three sections, operating, investing and financing, and why cash flow can reveal what earnings hide.
  • Earnings reports and calls What happens during earnings season, how to read an earnings release, what to listen for on the call, and why guidance moves stocks more than results.

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Last updated September 30, 2026. Education only, not investment advice.