by Chuck Kremer

Many non-financial business people do not really use financial information because it is generally presented in financial fragments. The dots are not connected and so the cause-and-effect relationships are not obvious.

There is no clarity between profit and cash flow. There is no obvious bottom line for either the cash-flow statement or for the balance sheet.

There is no distinction between what's most important. There is no one-page executive summary. Frequently trends are missing; instead they often see one-column balance sheets. Frequently ratios are missing.

There is no sacred financial glossary; think about the word "capital" and the 10 ways it can be used with financial-statement information (including the term "capital punishment").

There is no story to go with the numbers, which makes the numbers dry, dull and boring.

There is no regular group action planning (huddling) around the numbers. The information is generally presented in a detailed left-brain format, and without summarization. Many people are given the information without the training needed for using the information.

So why is this such a big deal, if lots of business people manage business without paying much attention to their financial statements? Because that is like running the Grand Canyon (or Indy 500) with only one arm or one eye. They may do okay in good economic times because they are very strong in a particular function of their business.

But it is difficult to survive and thrive in good times and bad if you are handicapped in financial literacy. It is difficult to make money over the long term in business if making money is not a focus.