Work through a set of financial statements and check each figure at its source
Financial statements look like a few pages of numbers, but each line on the balance sheet or income statement usually leans on a note further back that explains how it was measured, what it includes and what was left out. Add the statements to a Search+ workspace as the PDF or Excel file you received, ask about a line item in plain language, and open the cited excerpt to see the figure and the note behind it in the company's own wording.
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Last updated October 2026
How to review financial statements with Search+
- Upload the statements with the auditor's report and prior year
Add the annual statements, whether a signed PDF or an Excel file from the accounting system, the independent auditor's report if it is a separate file, last year's statements and any interim reports. With both years in one workspace, a question about a change can cite each period.
- Record your reading brief in Workspace Context
Write something like "I am a lender reviewing this borrower; give amounts with their units and period end date, and name the note each figure comes from". Every question in the workspace then follows that brief without you repeating it.
- Ask about one line item, then its note
Start with a figure on the face of a statement, such as inventory or accrued liabilities, and follow up with the note that explains it. Each answer has inline citations; open one to read the supporting excerpt, with a page or section reference when the statements provide one.
Questions owners, lenders and buyers ask of financial statements
What were revenue, gross profit and net income for each period shown, and which expense lines grew fastest?
How do current assets compare with current liabilities at year end, and what makes up the largest liability?
Which revenue recognition and inventory costing methods does the company say it uses, and did either change this year?
What kind of opinion did the auditor give, and does the report include an emphasis of matter or a going concern paragraph?
What lawsuits, guarantees or purchase commitments are described in the notes, and does the company estimate any amounts?
What does the subsequent events note say happened between the balance sheet date and the date the statements were issued?
What reading financial statements well takes
A full set usually holds a balance sheet, an income statement, a cash flow statement and a statement of changes in equity. Net income flows into equity and into the cash flow reconciliation, so a question about one statement often needs an answer from another.
Early in the notes the company states the framework it follows, such as US GAAP or IFRS, and whether the statements are consolidated. Two sets of statements built on different frameworks or scopes are not directly comparable line by line.
Column headings often say amounts are in thousands or millions, and fiscal years do not always end in December. Ask for the unit and the period end with every figure, and confirm both in the cited heading.
Statements may be audited, reviewed or compiled, and each gives a different level of comfort. The accountant's report at the front tells you which one you are reading, and whether the opinion carries any qualification.
Answers carry inline citations to the supporting excerpt, with a page or section reference when the document provides one. A figure can still be misread, so open the citation and check the number against the statement before you use it.
Statements reach readers as a PDF from the company, an Excel workbook from the bookkeeper, or a scanned photocopy of a signed set. Search+ takes each of these as it is, using OCR for the scanned pages.
The parts of a set of financial statements and a question for each
| Part of the statements | What it usually shows | A question to ask Search+ |
|---|---|---|
| Auditor's or accountant's report | The type of engagement and the opinion or conclusion | Is the audit opinion unqualified, and are any matters emphasized? |
| Balance sheet | Assets, liabilities and equity at the period end | What are the largest current liabilities and how did they change from last year? |
| Income statement | Revenue, expenses and profit for the period | Which operating expense lines rose the most compared with the prior period? |
| Statement of cash flows | Cash from operating, investing and financing activities | Why is cash from operations different from net income this year? |
| Statement of changes in equity | Share issuances, buybacks, dividends and retained earnings | Were any dividends declared or shares issued during the year? |
| Significant accounting policies note | How revenue, inventory, leases and other items are measured | How does the company recognize revenue on multi-period contracts? |
| Commitments and contingencies note | Lawsuits, guarantees and obligations not yet on the balance sheet | What contingent liabilities are disclosed, and are any amounts estimated? |
What are financial statements?
Financial statements are the formal reports of a business's financial position, results and cash flows for a period, prepared under an accounting framework and accompanied by notes that explain the figures. Companies prepare them for owners, lenders, regulators and tax purposes, and larger or listed companies usually have them audited.
Questions about reviewing financial statements with AI
Can Search+ explain a line on the balance sheet?
Will it tell me whether the audit opinion is clean?
Can it work out ratios such as the current ratio?
Can I ask what changed between this year and last year?
Does Search+ advise on whether a company is a sound investment or borrower?
What if the statements I have are a scanned copy?
Read the notes behind the numbers
Start a workspace, upload this year's and last year's statements, and ask about the line items that matter to you.
Start a workspace