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Watch out for "Sie - sie - sie" (you, she, they). The same word has different meanings. "Sie" with a capital S means 'you' in the formal address, "sie" can either be "she" or "they". You can usually determine by the size of the s and by the following verb (singular or plural)what is meant. Since each German sentence starts with a capital, however, you may just have to conclude from the sense of the sentence alone what it is.
1 Essen Sie Kaese? (Do you (formal) eat cheese?)
2 Am Abend singt sie. (She sings in the evening)
3 Am Abend singen sie. They sing in the evening)
4 Sie singt. (She sings)
5 Sie singen. (They sing)