In order to ball or cake the yarn, you will need to follow several steps. DO NOT CUT ANYTHING YET.
There are 3 ties through the yarn. 2 of them just keep things tidy. The third also has the ends of the hank tied into it. Open out the hank, snapping it between your hands a couple of times to help align the strands. Make sure you have those ties lined up so you don’t have any stands crossed the wrong way. If you don’t have a swift, put the opened-out hank over a couple of chairs, an upside down laundry basket, or something similar. Cut the 2 ties that don’t have the ends of the hank tied in, then untie or cut the last one. Choose one of the skein ends and start winding. Make sure your yarn ball isn’t wound too tightly—you want it to still have some squishableness.
It is generally recommended to leave the yarn in hank form until you are close to using it–prolonged storage in ball or cake form can decrease the yarn’s springiness.