You Know the Difference Between Cash and Profit. Right?

Here is a really, really scary factoid from Harvard Business Review.

"A majority of U.S. managers surveyed by the Business Literacy Institute were unable to distinguish profit from cash, and many didn't know the difference between an income statement and a balance sheet."

Admittedly, not all managers run P&L shops (That's "profit and loss" for you same folks identified in the paragraph above.) But still. Can you call yourself a manager without understanding the basic financial metric upon which your company's success is based?

This suggests, as does the related HBR article, that we need to do a much better job of training our employees in basic financial principles.

Take our poll. How would you describe your own financial literacy?

Sean Silverthorne

Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.

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