This document provides an overview of understanding a firm's financial statements. It discusses the purpose and content of the income statement, balance sheet, and statement of cash flows. The income statement shows a firm's profits/losses over a period of time. The balance sheet presents a snapshot of a firm's assets, liabilities, and owners' equity at a point in time. The statement of cash flows reports a firm's sources and uses of cash. Sample financial statements for a company called JM Dalton, Inc. are presented to illustrate these concepts. Analyzing all three statements together provides important information about a firm's financial performance and position.