Be careful about sending mixed messages. Management must continue to answer questions, discuss objectives, and encourage involvement. The Value of Business Literacy Training Results from a research study conducted in 2000 by the Business Literacy Institute show that business literacy training impacts both soft and hard measures of organizational success. Each of these questions are critical pieces of knowledge for employee-owners to truly think and act like owners. Profit is calculated based on promised revenues matched with expenses related to those revenues.
Cash is the actual dollars in the bank.
An organization can be profitable but not have any cash. The income statement reflects operations for a period of time, that is, revenue and expenses. The balance sheet reflects what a company owns, owes, and is worth at a point in time, that is, assets, liabilities and owners' equity. It is the percent of revenue that is kept as profit. All rights reserved.