When you read a financial statement, take a systematic approach.
First, check the heading that is required to be included at the top of every page. Headings will tell you what organization, or group of organizations, is the subject of the report. The headings will tell you the type of statement that is being provided and the relevant measurement date (for the Statement of Financial Position) or period of time (for the Statement of Activities, Statement of Functional Expenses, and Statement of Cash Flows) that is covered by the statement. The Statement of Financial Position is a snapshot of the organization's assets, liabilities, and net assets at a particular point in time, while the Statement of Activities shows the financial activity for a period of time ending on a particular date. The Statement of Cash Flows shows the sources and uses of cash for a period of time ending on a particular date. The Statement of Functional Expenses shows the analysis of expenses by natural and functional classifications for a period of time ending on a particular date.
Second, look for comparative data. For a Statement of Financial Position, you will usually be provided the organization's financial position at the same time in the prior year. For the Statement of Activities, you will usually be given information for the same period of time in the prior year (or possibly “this month” versus “year to date”). The most recent data are usually shown first.
Third, scan the page as a whole. Most statements are shown complete on one page. Once you understand the major components of the statement, you can work more confidently on the detail in each section.