Pronouns or Pronomen are used to replace a noun in a sentence.
In English, we have just YOU. And that's all we use, for anyone, ever. German has an informal version of 'you' (du) and a formal one (Sie). Then, there are singular versions AND plural versions of both! It means there are 4 types of 'you'.
In German one pronoun sie/Sie can have different meanings: she(sie), you (formal) singular and plural both(Sie) and they (sie).
So, how do we distinguish them? We distinguish them by their verb forms. We will come back to it later. For now let's have a look at a table of personal pronouns in german.
IÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â ich
you(informal)Â Â Â Â Â Â Â Â Â Â Â du
you(formal)Â Â Â Â Â Â Â Â Â Â Â Â Â Sie
he                      er
she                     sie
it                       es
we                      wir
you (pl)(inf)Â Â Â Â Â Â Â Â Â Â Â Â ihr
you(pl)(for)Â Â Â Â Â Â Â Â Â Â Â Â Sie
they                    sie
Here, we should also have a look at the verb sein 'to be'. It's an irregular verb.
I am                    ich bin
you are(inf)Â Â Â Â Â Â Â Â Â Â Â Â du bist
you are(for)Â Â Â Â Â Â Â Â Â Â Â Â Sie sind
he/she/it is             er/sie/es ist
we are                  wir sind
you are (pl)(inf)Â Â Â Â Â Â Â Â ihr seid
you are (pl)(for)Â Â Â Â Â Â Â Â Sie sind
they are                sie sind
Now let's practice to make some easy sentences using these pronouns and verb forms of sein.
Ich bin 20 Jahre alt.
I am 20 years old.
Wie alt bist du?
How old are you?
Ist er da?
Is he here?
Sie ist groÃ.
She is tall.
Hast du es?
Do you have it?
Wir sind gute Freunde.
We are good friends.
Sie kommen heute
They are coming today.
If you look at the sentences Sie ist groà and Sie kommen heute you will notice that both have the capital form of Sie. That is because they both come at the starting of the sentence. However, in the first sentence verb form(ist) gives away the gender of the subject(feminine).
In the second sentence, Pronoun Sie could also mean 'you'(formal) Sie. Only the context makes it clear which of the two is meant.
Important points about using Sie  you need to know are:
1. It is always capitalized. No exception.
2. Sie takes the same verb form as when it is conjugated in the plural form for Sie.
Singular          Plural
du trinkst         ihr trinkt
Sie trinken        Sie trinken
For now bis später! Tschüss!