How to Understand Financial Statements

  • Date: July 1, 2020
  • Format: online
How To Understand Financial Statements provides self-paced instruction in how to read and interpret a balance sheet and an income statement, which is also called a profit and loss statement. The distinction between cash and accrual accounting and the calculation and meaning of seven of the most commonly used financial ratios are also part of this program. This knowledge is needed to enable business owners to make fact-based decisions. Questions can be answered and follow-on assistance provided by contacting the nearest Small Business & Technology Development Center. This program is offered in six modules, anyone completing all six modules and the course completion survey will receive a course completion certificate.

The Missouri SBDC is funded in part through a Cooperative Agreement with the U.S. Small Business Administration and is a University of Missouri Extension partner. All opinions, conclusions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA. Reasonable accommodations for persons with disabilities will be made if requested in advance. To request accommodations contact [email protected]

Small Business Development Centers

 How To Understand Financial Statements

Course Developer

The course developer is a Business Development Field Specialist with the University of Missouri Extension's Small Business Development Center (SBDC).  The SBDC consists of a network of centers located in throughout the state on University of Missouri campuses and facilities, and on the campuses of other state universities.  Each center provides counseling, coaching, training, and specialized services for start-up and existing businesses.  If you have questions on the course's content, contact the center most convenient to your location.  Our centers can be found at

Course Description

The course is self-paced and consists of 6 modules, no module is more than 15 minutes in length. The entire self-paced course should take no more that 45 minutes, not including the exercises. The exercises are self-evaluated. There are no graded activities, quizzes or other assessments. The purpose of course is strictly to provide information and knowledge. There are no prerequisite knowledge and competencies.
There is a course registration form to complete and a course completion survey. With the completion of the course, to include the registration and survey, a course completion certificate can be downloaded.  
If you must leave the course and return later, click on Modules in the course navigation menu on the left of your screen.  The last bold face item with a Check-1.PNG is where you left off, the bold face item with a is where to start.

Course Objectives

By completing this course the student will be able to:

  • Identify and understand key business information on Profit and Loss Statements and Balance Sheets
  • Know how to calculate and use key Financial Ratios to make better business decisions

Course Organization

The six modules of this course are delivered in a lecture format. In addition to the course slides with speaker notes, there is a student workbook for note taking.  It also includes the case study and associated exercises.

Technical Requirements

See our Getting Started with Canvas page for short tutorial videos to provide an overview of Canvas.  When accessing your Canvas course from your mobile device, DO NOT use the Canvas Student App.

Access your course from your MU Extension account. For the best user experience, we recommend using  Google Chrome (70/71) as your browser (Safari 12.0.3 for Macintosh only).

If you don't have Google Chrome installed on your computer, download  the latest version.

Already using Google Chrome but not sure what version?  Simply select the three vertical dots in your browser menu, Help, and then About Google Chrome. That's it!  If there is a newer version available, Chrome will automatically update. 

You can find more information on the technical requirements on the Canvas website.

For technical questions or issues, please contact  Customer Support.

Additional Course Resources

Make sure to download this student workbook for How To Understand Financial Statements and the industry comparison report.


If you anticipate barriers related to the format or requirements of this course, or if disability-related accommodations are necessary (for example, extended time on exams, materials in an alternate format), please notify your instructor or contact Customer Support